IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2011-289.html

The Nonbank-Bank Nexus and the Shadow Banking System

Author

Listed:
  • Mr. Manmohan Singh
  • Mr. Zoltan Pozsar

Abstract

The present way of thinking about financial intermediation does not fully incorporate the rise of asset managers as a major source of funding for banks through the shadow banking system. Asset managers are dominant sources of demand for non-M2 types of money and serve as source collateral ?mines' for the shadow banking system. Banks receive funding through the re-use of pledged collateral ?mined' from asset managers. Accounting for this, the size of the shadow banking system in the U.S. may be up to $25 trillion at year-end 2007 and $18 trillion at year-end 2010, higher than earlier estimates. In terms of policy, regulators will need to consider the re-use of pledged collateral when defining bank leverage ratios. Also, given asset managers' demand for non-M2 types of money, monitoring the shadow banking system will warrant closer attention well beyond the regulatory perimeter.

Suggested Citation

  • Mr. Manmohan Singh & Mr. Zoltan Pozsar, 2011. "The Nonbank-Bank Nexus and the Shadow Banking System," IMF Working Papers 2011/289, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/289
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=25421
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robin Greenwood & Samuel G. Hanson & Jeremy C. Stein, 2015. "A Comparative-Advantage Approach to Government Debt Maturity," Journal of Finance, American Finance Association, vol. 70(4), pages 1683-1722, August.
    2. Arvind Krishnamurthy & Annette Vissing-Jorgensen, 2007. "The Demand for Treasury Debt," NBER Working Papers 12881, National Bureau of Economic Research, Inc.
    3. Hyun Song Shin, 2010. "Financial intermediation and the post-crisis financial system," BIS Working Papers 304, Bank for International Settlements.
    4. Tobias Adrian & Adam B. Ashcraft & Hayley Boesky & Zoltan Pozsar, 2013. "Shadow banking," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 1-16.
      • Tobias Adrian & Adam B. Ashcraft & Hayley Boesky & Zoltan Pozsar, 2010. "Shadow banking," Staff Reports 458, Federal Reserve Bank of New York.
    5. Perry Mehrling, 2010. "The New Lombard Street: How the Fed Became the Dealer of Last Resort," Economics Books, Princeton University Press, edition 1, number 9298, December.
    6. Mr. Manmohan Singh, 2010. "Collateral, Netting and Systemic Risk in the OTC Derivatives Market," IMF Working Papers 2010/099, International Monetary Fund.
    7. Mr. Manmohan Singh & James Aitken, 2010. "The (Sizable) Role of Rehypothecation in the Shadow Banking System," IMF Working Papers 2010/172, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yeva Nersisyan, 2015. "The Repeal of the Glass-Steagall Act and the Federal Reserve's Extraordinary Intervention during the Global Financial Crisis," Economics Working Paper Archive wp_829, Levy Economics Institute.
    2. Juan A. Montecino & Gerald Epstein, 2014. "Intra-Financial Lending, Credit, and Capital Formation," Working Papers Series 21, Institute for New Economic Thinking.
    3. Shengxing Zhang, 2014. "Collateral Risk, Repo Rollover and Shadow Banking," 2014 Meeting Papers 562, Society for Economic Dynamics.
    4. Mr. Manmohan Singh, 2011. "Velocity of Pledged Collateral: Analysis and Implications," IMF Working Papers 2011/256, International Monetary Fund.
    5. Matthew Dive & Ronan Hodge & Catrin Jones & James Purchase, 2011. "Developments in the global securities lending market," Bank of England Quarterly Bulletin, Bank of England, vol. 51(3), pages 224-233.
    6. Andrea Aguiar & Richard Bookstaber & Dror Y. Kenett & Thomas Wipf, 2016. "A Map of Collateral Uses and Flows," Working Papers 16-06, Office of Financial Research, US Department of the Treasury.
    7. Arvind Krishnamurthy & Stefan Nagel & Dmitry Orlov, 2014. "Sizing Up Repo," Journal of Finance, American Finance Association, vol. 69(6), pages 2381-2417, December.
    8. Cabral, Ricardo, 2013. "A perspective on the symptoms and causes of the financial crisis," Journal of Banking & Finance, Elsevier, vol. 37(1), pages 103-117.
    9. Ebrahim, M. Shahid & Jaafar, Aziz & Omar, Fatma A. & Salleh, Murizah Osman, 2016. "Can Islamic injunctions indemnify the structural flaws of securitized debt?," Journal of Corporate Finance, Elsevier, vol. 37(C), pages 271-286.
    10. Swati Ghosh & Ines Gonzalez del Mazo & ?nci Ötker-Robe, 2012. "Chasing the Shadows : How Significant is Shadow Banking in Emerging Markets?," World Bank Publications - Reports 17088, The World Bank Group.
    11. Mr. Manmohan Singh, 2011. "Making OTC Derivatives Safe—A Fresh Look," IMF Working Papers 2011/066, International Monetary Fund.
    12. Mr. Zoltan Pozsar, 2011. "Institutional Cash Pools and the Triffin Dilemma of the U.S. Banking System," IMF Working Papers 2011/190, International Monetary Fund.
    13. António Afonso & José Alves & Wojciech Grabowski & Sofia Monteiro, 2025. "Too Much in One Basket? Debt Concentration and Sovereign Yields," Working Papers REM 2025/0381, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    14. Duca, John V., 2013. "Did the commercial paper funding facility prevent a Great Depression style money market meltdown?," Journal of Financial Stability, Elsevier, vol. 9(4), pages 747-758.
    15. Nikolay Nenovsky & Tsvetelina Marinova, 2022. "The first steps of the lender of last resort in Bulgaria. History and debates during the Great Depression," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 28-53.
    16. Malcolm Baker & Jeffrey Wurgler, 2013. "Do Strict Capital Requirements Raise the Cost of Capital? Banking Regulation and the Low Risk Anomaly," NBER Working Papers 19018, National Bureau of Economic Research, Inc.
    17. Tobias Adrian & Nellie Liang, 2018. "Monetary Policy, Financial Conditions, and Financial Stability," International Journal of Central Banking, International Journal of Central Banking, vol. 14(1), pages 73-131, January.
    18. Josef Schroth, 2021. "Optimal Monetary and Macroprudential Policies," Staff Working Papers 21-21, Bank of Canada.
    19. Maryam Farboodi, 2014. "Intermediation and Voluntary Exposure to Counterparty Risk," 2014 Meeting Papers 365, Society for Economic Dynamics.
    20. Sebastiaan Pool, 2018. "Mortgage debt and shadow banks," DNB Working Papers 588, Netherlands Central Bank, Research Department.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    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:imf:imfwpa:2011/289. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.