Two key developments
Tobias Adrian argues that there have been two changes in non-bank intermediation since the financial crisis: a) “a swing away from riskier aspects of shadow banking toward market-based finance”; and b) an increase of shadow banking entities in emerging markets. But how about the US leveraged loan market were new issuance set a record in 2017 and the amount of outstanding loans is significantly higher than it was in 2008?
Shadow Banking and Market Based Finance
By: Tobias Adrian – IMF
The rise of fintech
The market share of shadow banks in originating residential mortgages nearly doubled from 2007-2015 with fintech, (online mortgage application process) accounting for almost a quarter of these originations according to Buchak and al. What is the impact of this trend on financial stability?
Fintech, Regulatory Arbitrage, and the Rise of Shadow Banks
Authors: Greg Buchak, Gregor Matvos, Tomasz Piskorski and Amit Seru
From: University of Chicago – Columbia University – Stanford University
A challenge for macroprudential policies
Abad and al. “drawing on a unique data collection exercise by the EBA in March 2015” find that 27% of the total shadow-banking exposure of EU banks is to shadow banking entities domiciled in the US. Which policy reforms can address this shadow banking interconnectedness?
Source: Shadow Banking and Macroprudential Regulation – Richard Portes
Mapping the interconnectedness between EU banks and shadow banking entities
Authors: Jorge Abad, Marco D’Errico, Neill Killeen, Vera Luz, Tuomas Peltonen, Richard Portes, Teresa Urbano
From: European Systemic Risk Board
