IDEAS home Printed from https://ideas.repec.org/p/fip/fednsr/705.html
   My bibliography  Save this paper

Hybrid intermediaries

Author

Listed:
  • Cetorelli, Nicola

    (Federal Reserve Bank of New York)

Abstract

I introduce the concept of hybrid intermediaries: financial conglomerates that control a multiplicity of entity types active in the “assembly line” process of modern financial intermediation, a system that has become known as shadow banking. The complex bank holding companies of today are the best example of hybrid intermediaries, but I argue that financial firms from the “nonbank” space can just as easily evolve into conglomerates with similar organizational structure, thus acquiring the capability to engage in financial intermediation. I document instances of the emergence and growth of such nonbank hybrid intermediaries. Notable nonbank firms (for example, from the investment banking or specialty lending sectors) that had become significant intermediaries and that turned into bank holding companies post-Lehman are, from an organizational standpoint, indistinguishable from firms with a traditional banking origin. Similar inference can be drawn by analyzing specific activities. I focus on securities lending, a well-understood example of shadow financial intermediation, and document the emergence of a firm from the asset management sector as one of the largest providers of related intermediation services globally.

Suggested Citation

  • Cetorelli, Nicola, 2014. "Hybrid intermediaries," Staff Reports 705, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:705
    as

    Download full text from publisher

    File URL: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr705.pdf
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    as
    1. Nicola Cetorelli & Benjamin H. Mandel & Lindsay Mollineaux, 2012. "The evolution of banks and financial intermediation: framing the analysis," Economic Policy Review, Federal Reserve Bank of New York, issue Jul, pages 1-12.
    2. Daniel Covitz & Nellie Liang & Gustavo A. Suarez, 2013. "The Evolution of a Financial Crisis: Collapse of the Asset-Backed Commercial Paper Market," Journal of Finance, American Finance Association, vol. 68(3), pages 815-848, June.
    3. Gorton, Gary & Metrick, Andrew, 2012. "Securitized banking and the run on repo," Journal of Financial Economics, Elsevier, vol. 104(3), pages 425-451.
    4. Tobias Adrian & Brian Begalle & Adam Copeland & Antoine Martin, 2013. "Repo and Securities Lending," NBER Chapters,in: Risk Topography: Systemic Risk and Macro Modeling, pages 131-148 National Bureau of Economic Research, Inc.
    5. Kirk, Adam & McAndrews, James J. & Sastry, Parinitha & Weed, Phillip, 2014. "Matching collateral supply and financing demands in dealer banks," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 127-151.
    6. Avraham, Dafna & Selvaggi, Patricia & Vickery, James, 2012. "A Structural view of U.S. bank holding companies," Economic Policy Review, Federal Reserve Bank of New York, issue 07, pages 65-81.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abad, Jorge & D'Errico, Marco & Killeen, Neill & Luz, Vera & Peltonen, Tuomas & Portes, Richard & Urbano, Teresa, 2017. "Mapping the interconnectedness between EU banks and shadow banking entities," CEPR Discussion Papers 11919, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    intermediation; conglomeration;

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednsr:705. 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: (Amy Farber). General contact details of provider: http://edirc.repec.org/data/frbnyus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.