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Shedding Light on Shadow Banking

Author

Listed:
  • Artak Harutyunyan
  • Mr. Alexander Massara
  • Giovanni Ugazio
  • Goran Amidžic
  • Richard Walton

Abstract

In this paper, we develop an alternative approach to estimate the size of the shadow banking system, using official data reported to the IMF complemented by other data sources. We base our alternative approach on the expansion of the noncore liabilities concept developed in recent literature to encompass all noncore liabilities of both bank and nonbank financial institutions. As opposed to existing measures of shadow banking, our newly developed measures capture nontraditional funding raised by traditional banks. We apply the new approach to 26 jurisdictions and analyze the results over a twelve-year span. We find that noncore liabilities are procyclical and display more volatility than core liabilities for most jurisdictions in the sample. We also compare our measures to existing measures, such as the measure developed by the Financial Stability Board. Our approach can be replicated over time using internationally-comparable data and thus may serve as an operational tool for IMF surveillance and policy analysis.

Suggested Citation

  • Artak Harutyunyan & Mr. Alexander Massara & Giovanni Ugazio & Goran Amidžic & Richard Walton, 2015. "Shedding Light on Shadow Banking," IMF Working Papers 2015/001, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2015/001
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    References listed on IDEAS

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    Cited by:

    1. Lopez, Claude & Markwardt, Donald & Savard, Keith, 2015. "Macroprudential Policy: What Does It Really Mean," MPRA Paper 68157, University Library of Munich, Germany.
    2. Mérő, Katalin & Bethlendi, András, 2023. "Árnyékbankrendszer Magyarországon [Shadow banking in Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 1001-1020.
    3. Frederic Boissay & Fabrice Collard, 2016. "Macroeconomics of bank capital and liquidity regulations," BIS Working Papers 596, Bank for International Settlements.
    4. Lopez, Claude & Markwardt, Donald & Savard, Keith, 2015. "Macroprudential Policy: A Silver Bullet or Refighting the Last War?," MPRA Paper 64499, University Library of Munich, Germany.
    5. Herman, Alexander & Igan, Deniz & Solé, Juan, 2017. "The macroeconomic relevance of bank and nonbank credit: An exploration of U.S. data," Journal of Financial Stability, Elsevier, vol. 32(C), pages 124-141.
    6. Anna Maria Agresti & Rok Brence, 2017. "Statistical work on shadow banking: development of new datasets and indicators for shadow banking," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Data needs and Statistics compilation for macroprudential analysis, volume 46, Bank for International Settlements.
    7. Anna Maria Agresti, 2016. "Shadow banking: some considerations for measurements purposes," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Combining micro and macro data for financial stability analysis, volume 41, Bank for International Settlements.
    8. Antonio Bianco & Claudio Sardoni, 2018. "Banking theories and macroeconomics," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 41(2), pages 165-184, April.
    9. Altaf Hussain & Jianbo Bao & Fanli, 2019. "The impacts of Shadow banking system on economy. An empirical analysis," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 9(3), pages 1-1.
    10. Gökçer Özgür, 2021. "Shadow banking and financial intermediation," Metroeconomica, Wiley Blackwell, vol. 72(4), pages 731-757, November.
    11. Cristina Ruza & Marta de la Cuesta-González & Juandiego Paredes-Gazquez, 2019. "Banking system resilience: an empirical appraisal," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(6), pages 1241-1257, October.
    12. Alexander Herman & Ms. Deniz O Igan & Mr. Juan Sole, 2015. "The Macroeconomic Relevance of Credit Flows: An Exploration of U.S. Data," IMF Working Papers 2015/143, International Monetary Fund.
    13. Diallo, Boubacar & Al-Mansour, Abdullah, 2017. "Shadow banking, insurance and financial sector stability," Research in International Business and Finance, Elsevier, vol. 42(C), pages 224-232.
    14. Maurizio Trapanese, 2021. "The economics of non-bank financial intermediation: why do we need to fill the regulation gap?," Questioni di Economia e Finanza (Occasional Papers) 625, Bank of Italy, Economic Research and International Relations Area.
    15. Shugo Yamamoto, 2020. "Global Liquidity,Offshore Bond Issuance and Shadow Banking in China," Discussion Papers 2011, Graduate School of Economics, Kobe University.
    16. Karl Michael Beyer & Lars Braeutigam, 2016. "Das europaeische Schattenbankensystem: Typologisierung und die Bewertung regulatorischer Initiativen auf europaeischer Ebene," ICAE Working Papers 56, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    17. Bellavite Pellegrini, Carlo & Meoli, Michele & Urga, Giovanni, 2017. "Money market funds, shadow banking and systemic risk in United Kingdom," Finance Research Letters, Elsevier, vol. 21(C), pages 163-171.
    18. Engin Yilmaz & Bora Suslu, 2016. "Turkish Non-Core Bank Liabilities," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 14(1), pages 75-92.
    19. Lars Bräutigam & Karl Michael Beyer, 2016. "Das europäische Schattenbankensystem," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 154, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.

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