Financial Stability Policies for Shadow Banking

37 Pages Posted: 14 Feb 2014

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2014

Abstract

This paper explores financial stability policies for the shadow banking system. I tie policy options to economic mechanisms for shadow banking that have been documented in the literature. I then illustrate the role of shadow bank policies using three examples: agency mortgage real estate investment trusts, leveraged lending, and captive reinsurance affiliates. For each example, the economic mechanisms are explained, the potential risks emanating from the activities are described, and policy options to mitigate such risks are listed. The overarching theme of the analysis is that any policy prescription for the shadow banking system is highly specific to the particular activity.

Keywords: shadow bank policies, systemic risk, financial intermediation

JEL Classification: E44, G00, G01, G28

Suggested Citation

Adrian, Tobias, Financial Stability Policies for Shadow Banking (February 1, 2014). FRB of New York Staff Report No. 664, Available at SSRN: https://ssrn.com/abstract=2395367 or http://dx.doi.org/10.2139/ssrn.2395367

Tobias Adrian (Contact Author)

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

HOME PAGE: http://www.tobiasadrian.com

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