The Governance of the Black Holes of the World Economy: Shadow Banking and Offshore Finance
This paper focuses on regulatory challenges posed by the two interconnected structures of the global financial system – the economy of tax havens (or offshore financial centres), and the shadow banking system. The financial crisis of 2007-09 has revealed that tax havens structures and shadow banking entities play a central role in the practise of financial institutions reliant on financial innovation. Thriving on complexity, opaque networks and driven by arbitrage, the two phenomena pose tremendous challenges to national and international regulators aiming to restore the financial cycle in the recessionary environment. In this paper, we analyse "the state of play" and the current plans for the governance of tax havens, offshore finance and the shadow banking industry. We find that although offshore financial centres and shadow banking are outside the scope of academic economics, they have attracted a lot of attention on the part of financial researchers and regulators. Along with other macro-prudential and system risk concerns, the regulation, or governance of these "black holes" of the global economy is increasingly assuming a central place on the agenda of financial regulators. In what follows, we explore the reasons behind this development.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0)20 7040 8500
Web page: http://www.city.ac.uk/arts-social-sciences/international-politics/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tobias Adrian & Brian Begalle & Adam Copeland & Antoine Martin, 2012.
"Repo and Securities Lending,"
NBER Working Papers
18549, National Bureau of Economic Research, Inc.
- Sverre Knutsen, 2012. "Why do banking crises occur? The American subprime crisis compared with the Norwegian banking crisis 1987-92," Working Paper 2012/03, Norges Bank.
- Arvind Krishnamurthy & Stefan Nagel & Dmitry Orlov, 2014.
"Sizing Up Repo,"
Journal of Finance,
American Finance Association, vol. 69(6), pages 2381-2417, December.
- Jan Kregel, 2010. "No Going Back: Why We Cannot Restore Glass-Steagall's Segregation of Banking and Finance," Economics Public Policy Brief Archive ppb_107, Levy Economics Institute.
- Andreas Buehn & Friedrich Schneider, 2012. "Shadow economies around the world: novel insights, accepted knowledge, and new estimates," International Tax and Public Finance, Springer, vol. 19(1), pages 139-171, February.
- Swati Ghosh & Ines Gonzalez del Mazo & ?nci Ötker-Robe, 2012. "Chasing the Shadows : How Significant is Shadow Banking in Emerging Markets?," World Bank Other Operational Studies 17088, The World Bank.
- Thorvald Grung Moe, 2012. "Shadow Banking and the Limits of Central Bank Liquidity Support: How to Achieve a Better Balance between Global and Official Liquidity," Economics Working Paper Archive wp_712, Levy Economics Institute.
- Ghosh, Swati & Gonzalez del Mazo, Ines & İnci Ötker-Robe, 2012. "Chasing the Shadows: How Significant Is Shadow Banking in Emerging Markets?," World Bank - Economic Premise, The World Bank, issue 88, pages 1-7, September.
When requesting a correction, please mention this item's handle: RePEc:dip:dpaper:2013-03. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Research Publications Librarian)
If references are entirely missing, you can add them using this form.