Journal ArticleDOI
Shadow Banking: Economics and Policy
TLDR
In this article, the authors focus on two functions of shadow banking: securitization and collateral intermediation, and describe operations of the shadow banking system, demand factors, systemic risks, and associated policy priorities.Abstract:
The paper focuses on two functions of shadow banking: securitization and collateral intermediation. It describes operations of the shadow banking system, demand factors, systemic risks, and associated policy priorities.read more
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Journal ArticleDOI
What is Shadow Banking
TL;DR: In this paper, the authors define shadow banking as "all financial activities, except traditional banking, which require a private or public backstop to operate" and propose a backstop as a crucial feature of shadow banking.
Journal ArticleDOI
An Overview of Macroprudential Policy Tools
TL;DR: Macro-prudential policies, such as caps on loan to value ratios, limits on credit growth and other balance-sheet restrictions, countercyclical capital and reserve requirements and surcharges, and Pigouvian levies, have become part of the policy paradigm in emerging markets and developed countries alike as discussed by the authors.
Journal ArticleDOI
Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research
TL;DR: In this article, the authors examine the recent empirical literature in Islamic banking and finance, highlight the main findings and provide a guide for future research, concluding that there are no major differences between Islamic and conventional banks in terms of their efficiency, competition and risk features.
Journal ArticleDOI
The (impossible) repo trinity: The political economy of repo markets
TL;DR: The concept of the "repo trinity" was introduced by as mentioned in this paper, which captures a set of policy objectives that central banks outlined after the 1998 Russian crisis, the first systemic crisis of collateral-based finance, connecting financial stability with liquid government bond markets and free repo markets.
Journal ArticleDOI
Competitive Advantages of Shadow Banking Industry: An Analysis Using Porter Diamond Model
TL;DR: In this article, the authors tried to find out why shadow banking system has become so competitive in the global financial system and how it can be controlled, and they used Porter's diamond model to find the competitive advantages of shadow banking.
References
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Posted Content
Market liquidity and funding liquidity
TL;DR: In this article, the authors provide a model that links an asset's market liquidity and traders' funding liquidity, i.e., the ease with which they can obtain funding, to explain the empirically documented features that market liquidity can suddenly dry up, has commonality across securities, is related to volatility, is subject to flight to quality, and comoves with the market.
Journal ArticleDOI
Liquidity and Leverage
Tobias Adrian,Hyun Song Shin +1 more
TL;DR: In a financial system in which balance sheets are continuously marked to market, asset price changes appear immediately as changes in net worth, eliciting responses from financial intermediaries who adjust the size of their balance sheets as mentioned in this paper.
ReportDOI
Has Financial Development Made the World Riskier? 1
TL;DR: In this paper, the authors discuss the implications of monetary policy and prudential supervision on financial intermediaries and suggest market-friendly policies that would reduce the incentive of intermediary managers to take excessive risk.
Journal ArticleDOI
Systemic Risk and Stability in Financial Networks
Daron Acemoglu,Daron Acemoglu,Daron Acemoglu,Asuman Ozdaglar,Alireza Tahbaz-Salehi,Alireza Tahbaz-Salehi +5 more
TL;DR: In this article, the authors provide a framework for studying the relationship between the financial network architecture and the likelihood of systemic failures due to contagion of counterparty risk, and show that financial contagion exhibits a form of phase transition as interbank connections increase.
Journal ArticleDOI
Market Liquidity and Funding Liquidity
TL;DR: In this paper, the authors provide a model that links a security's market liquidity and traders' availability of funds, showing that reductions in market liquidity are mutually reinforcing, leading to a liquidity spiral and that the Fed can improve current market liquidity by committing to improve funding in a potential future crisis.