European Parliament Library

What is Shadow Banking?, Stijn Claessens, Lev Ratnovski

Contributor
Abstract
There is much confusion about what shadow banking is. Some equate it with securitization, others with non-traditional bank activities, and yet others with non-bank lending. Regardless, most think of shadow banking as activities that can create systemic risk. This paper proposes to describe shadow banking as “all financial activities, except traditional banking, which require a private or public backstop to operate”. Backstops can come in the form of franchise value of a bank or insurance company, or in the form of a government guarantee. The need for a backstop is in our view a crucial feature of shadow banking, which distinguishes it from the “usual” intermediated capital market activities, such as custodians, hedge funds, leasing companies, etc
Table Of Contents
Cover; Contents; I. Introduction; II. A New Way to Describe Shadow Banking; A. Shadow Banking: All Activities That Need a Backstop; B. Why do Shadow Banking Activities Always Need a Backstop?; Figures; 1. Spectrum of Financial Activities; C. The Need for a Backstop as a "Litmus test" for Shadow Banking; III. Policy implications; References
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (10 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781475515213

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