146 research outputs found

    Banking Stability and Shadow banking: New Overview for the United States

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    This paper analyses commercial banking and shadow banking, with the intention of understanding different channels of instability that can occur through both types of banking for the United States. The work is pioneering a comprehensive vision of shadow banking and its interrelation with commercial banking. The results of the work are designed to encourage reflection on possible mediums to promote the stability of shadow banking, through new risk indicators. Finally, these indicators are tested using machine learning techniques

    The Interconnections Between the Shadow Banking System and the Regular Banking System. Evidence from the Euro Area

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    One of the most important lessons of the global financial crisis has been the deep interconnectedness between the shadow banking system and the regular banking system. These two systems are linked through several channels, of which one of the most important is the financing provided by regular banks to the shadow banking system and vice versa. In addition, regular banks can originate loans that are securitized. Subsequently, part of the securitized instruments may remain on the balance sheet of the originating banks or be found on the balance sheet of other regular banks and shadow banking entities. These links between the two systems can increase contagion and systemic risks, which in turn may affect financial stability. The financial crisis has acutely revealed the negative effects these interconnections can generate. The interconnections are underestimated by the available data because of the difficulties in gathering information on the euro area. Within this context, our paper tries to evaluate and analyze the interconnections between the shadow banking system and the regular banking system within the euro area, both in the pre-crisis period and currently. Finally, some measures to regulate the interconnections between these two systems are raised

    Geld stinkt doch! Oder: Wie schmutziges Geld durch Geldwäsche auf saubere Konten gelangt

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    Money is means of payment, it needs a legal form. Money resulting from illegal business lacks this legal shape, it needs “money laundering”. Methods of money laundering especially related to electronic banking and “shadow-banking” are discussed. The harmfulness of money laundering and is shown as well as the consequences for the social regime of time and space: only presence counts, instead of concrete territories abstract nodal points of networks come into play

    Financial Stability, New Macro Prudential Arrangements and Shadow Banking: Regulatory Arbitrage and Stringent Basel I I I Regulations

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    Despite Basel III’s efforts to address capital and liquidity requirements, will the risks linked to regulatory arbitrage increase as a result of Basel III’s more stringent capital and liquidity rules? As well as Basel III reforms which are geared towards greater facilitation of financial stability on a macro prudential basis, further efforts and initiatives aimed at mitigating systemic risks – hence fostering financial stability, have been promulgated through the establishment of the De Larosiere Group, the European Systemic Risk Board, and a working group comprising of “international standard setters and authorities responsible for the translation of G20 commitments into standards.” This paper aims to investigate the impact of Basel III on shadow banking and its facilitation of regulatory arbitrage as well as consider the response of various jurisdictions and standard setting bodies to aims and initiatives aimed at improving their macro prudential frameworks. Furthermore, it will also aim to illustrate why immense work is still required at European level – as regards efforts to address systemic risks on a macro prudential basis. This being the case even though significant efforts and steps have been taken to address the macro prudential framework. In so doing, the paper will also attempt to address how coordination within the macro prudential framework – as well as between micro and macro prudential supervision could be enhanced

    Making Sense of the Rise of China's Shadow-Banking

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    This paper aims to make sense of the rise of shadow banking in the context of the Chinese economic transformation to see if the regulator could avoid the hard-crash. Reportedly the estimated size of China's shadow banking system has reached to the level of equivalent to 36 percent of GDP as of the end of March 2013. But the emergence of systemic risk in accordance with the expansion of shadow banking in China does not seem to be a strong possibility, partly because even if the turmoil in the shadow banking occurs, commercial banks typically are not responsible for compensating customer losses so far as an effective firewall between commercial banking and shadow banking is constructed. Meanwhile, the information on who provides risk funds to the shadow banking system and on how the funds are used by ultimate users is still under the shadow of the system. This paper aims to make sense of the limited disclosure of information on shadow banking for the regulator to ease the so-called "audience effects", making time for the transformation to a new phase of post-industrialization. Keywords: Audience effect, China, Shadow bankin

    Financial stability, new macro prudential arrangements and shadow banking: regulatory arbitrage and stringent Basel III regulations

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    Despite Basel III’s efforts to address capital and liquidity requirements, will the risks linked to regulatory arbitrage increase as a result of Basel III’s more stringent capital and liquidity rules? As well as Basel III reforms which are geared towards greater facilitation of financial stability on a macro prudential basis, further efforts and initiatives aimed at mitigating systemic risks – hence fostering financial stability, have been promulgated through the establishment of the De Larosiere Group, the European Systemic Risk Board, and a working group comprising of “international standard setters and authorities responsible for the translation of G20 commitments into standards.” This paper aims to investigate the impact of Basel III on shadow banking and its facilitation of regulatory arbitrage as well as consider the response of various jurisdictions and standard setting bodies to aims and initiatives aimed at improving their macro prudential frameworks. Furthermore, it will also aim to illustrate why immense work is still required at European level – as regards efforts to address systemic risks on a macro prudential basis. This being the case even though significant efforts and steps have been taken to address the macro prudential framework. In so doing, the paper will also attempt to address how coordination within the macro prudential framework – as well as between micro and macro prudential supervision could be enhanced.counter party risks; liquidity; European Systemic Risk Board; stability; systemic risk; Shadow Banking; central banks; regulatory arbitrage; OTC derivatives; European Central Bank; supervision; coordination

    Securing Effective Regulation of the Shadow Banking System

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    This article examines the recent regulatory reforms of the shadow banking system and why they were necessary. Using securitisation, securities financing and money market funds as illustrations, the article concludes that the diverse and extensive new regulations on shadow banking are likely to succeed because they build upon some core principles that have been trialled elsewhere in the contemporary and wider financial regulation. While those core principles extend the boundaries of conventional banking regulation, they aim to accomplish the same objective of financial stability. Viewed in that light, the article concludes, the new regulations on shadow banking constitute an evolutionary positive step that fortifies the core principles of modern financial regulation
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