Shadow Banking And The Conduct Of Monetary And Macroprudential Policy

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Shadow Banking and the Conduct of Monetary and Macroprudential Policy

Philipp Kirchner
Shadow Banking and the Conduct of Monetary and Macroprudential Policy Book PDF

Author : Philipp Kirchner
Publisher : BoD – Books on Demand
Page : 142 pages
File Size : 55,5 Mb
Release : 2020-01-01
Category : Business & Economics
ISBN : 9783737609036

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Shadow Banking and the Conduct of Monetary and Macroprudential Policy by Philipp Kirchner Pdf

Since the occurrence of the Great Financial Crisis (GFC) in 2007/2008, our understanding of (macro) economics changed fundamentally. The evolution of the GFC revealed fundamental changes in the structural composition of financial systems in that traditional retail banking services, especially in the U.S., shifted progressively into a market-based banking system called the shadow banking system. Consequently, policy makers were forced to adapt the existing toolkit in two ways: implementing unconventional monetary measures to stimulate markets and introducing macroprudential measures as laid down in the BASEL III-framework geared towards the resilience and stability of the financial sector. This thesis addresses these aspects by using state-of-the-art closed- and open-economy dynamic stochastic general equilibrium models to analyze the impact of shadow banking on the business cycle and on the interaction with monetary and macroprudential policy measures.

Key Aspects of Macroprudential Policy - Background Paper

International Monetary Fund. Fiscal Affairs Dept.,International Monetary Fund. Monetary and Capital Markets Department
Key Aspects of Macroprudential Policy Background Paper Book PDF

Author : International Monetary Fund. Fiscal Affairs Dept.,International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 64 pages
File Size : 46,9 Mb
Release : 2013-10-06
Category : Business & Economics
ISBN : 9781498341714

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Key Aspects of Macroprudential Policy - Background Paper by International Monetary Fund. Fiscal Affairs Dept.,International Monetary Fund. Monetary and Capital Markets Department Pdf

The countercyclical capital buffer (CCB) was proposed by the Basel committee to increase the resilience of the banking sector to negative shocks. The interactions between banking sector losses and the real economy highlight the importance of building a capital buffer in periods when systemic risks are rising. Basel III introduces a framework for a time-varying capital buffer on top of the minimum capital requirement and another time-invariant buffer (the conservation buffer). The CCB aims to make banks more resilient against imbalances in credit markets and thereby enhance medium-term prospects of the economy—in good times when system-wide risks are growing, the regulators could impose the CCB which would help the banks to withstand losses in bad times.

Shadow Banking System

Tobias Adrian
Shadow Banking System Book PDF

Author : Tobias Adrian
Publisher : DIANE Publishing
Page : 16 pages
File Size : 50,5 Mb
Release : 2010-10
Category : Electronic
ISBN : 9781437925166

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Shadow Banking System by Tobias Adrian Pdf

The current financial crisis has highlighted the growing importance of the ¿shadow banking system,¿ which grew out of the securitization of assets and the integration of banking with capital market developments. This trend has been most pronounced in the U.S., but it has had a profound influence on the global financial system. Securitization was intended as a way to transfer credit risk to those better able to absorb losses, but instead it increased the fragility of the entire financial system by allowing banks and other intermediaries to ¿leverage up¿by buying one another¿s securities. In the new, post-crisis financial system, the role of securitization will likely be held in check by more stringent financial regulation. Charts and tables.

Shadow Banking

Mr.Stijn Claessens,Mr.Lev Ratnovski,Mr.Manmohan Singh
Shadow Banking Book PDF

Author : Mr.Stijn Claessens,Mr.Lev Ratnovski,Mr.Manmohan Singh
Publisher : International Monetary Fund
Page : 37 pages
File Size : 49,6 Mb
Release : 2012-12-04
Category : Business & Economics
ISBN : 9781475583588

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Shadow Banking by Mr.Stijn Claessens,Mr.Lev Ratnovski,Mr.Manmohan Singh Pdf

This note outlines the basic economics of the shadow banking system, highlights (systemic) risks related to it, and suggests implications for measurement and regulatory approaches.

Effective Macroprudential Policy

Janko Cizel,Jon Frost,Aerdt Houben,Peter Wierts
Effective Macroprudential Policy Book PDF

Author : Janko Cizel,Jon Frost,Aerdt Houben,Peter Wierts
Publisher : International Monetary Fund
Page : 47 pages
File Size : 49,5 Mb
Release : 2016-04-26
Category : Business & Economics
ISBN : 9781484340578

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Effective Macroprudential Policy by Janko Cizel,Jon Frost,Aerdt Houben,Peter Wierts Pdf

Macroprudential policy is increasingly being implemented worldwide. Its effectiveness in influencing bank credit and its substitution effects beyond banking have been a key subject of discussion. Our empirical analysis confirms the expected effects of macroprudential policies on bank credit, both for advanced economies and emerging market economies. Yet we also find evidence of substitution effects towards nonbank credit, especially in advanced economies, reducing the policies’ effect on total credit. Quantity restrictions are particularly potent in constraining bank credit but also cause the strongest substitution effects. Policy implications indicate a need to extend macroprudential policy beyond banking, especially in advanced economies.

Macroprudential Regulation and Leakage to the Shadow Banking Sector

Stefan Gebauer,Falk Mazelis
Macroprudential Regulation and Leakage to the Shadow Banking Sector Book PDF

Author : Stefan Gebauer,Falk Mazelis
Publisher : Unknown
Page : 128 pages
File Size : 40,7 Mb
Release : 2019
Category : Electronic
ISBN : OCLC:1159037524

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Macroprudential Regulation and Leakage to the Shadow Banking Sector by Stefan Gebauer,Falk Mazelis Pdf

Macroprudential policies for financial institutions have received increasing prominence since the global financial crisis. These policies are often aimed at the commercial banking sector, while a host of other non-bank financial institutions, or shadow banks, may not fall under their jurisdiction. We study the effects of tightening commercial bank regulation on the shadow banking sector. For this purpose, we develop a DSGE model that differentiates between regulated, monopolistically competitive commercial banks and a shadow banking system that relies on funding in a perfectly competitive market for investments. After estimating the model using euro area data from 1999-2014 including information on shadow banks, we find that tighter capital requirements on commercial banks increase shadow bank lending, which may have adverse financial stability effects. Coordinating the macroprudential tightening with monetary easing can limit this leakage mechanism, while still bringing about the desired reduction in aggregate lending. We discuss how regulators that either do or do not consider credit leakage to shadow banks set policy in response to macroeconomic shocks. Lastly, in a counterfactual analysis, we then compare how a macroprudential policy implemented before the crisis on all financial institutions, or just on commercial banks, would have dampened the leverage cycle.

The Handbook of Global Shadow Banking, Volume II

Luc Nijs
The Handbook of Global Shadow Banking Volume II Book PDF

Author : Luc Nijs
Publisher : Springer Nature
Page : 759 pages
File Size : 48,7 Mb
Release : 2020-06-30
Category : Business & Economics
ISBN : 9783030348175

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The Handbook of Global Shadow Banking, Volume II by Luc Nijs Pdf

This global handbook provides an up-to-date and comprehensive overview of shadow banking, or market-based finance as it has been recently coined. Engaging in financial intermediary services outside of normal regulatory parameters, the shadow banking sector was arguably a critical factor in causing the 2007-2009 financial crisis. This second volume explores three particular domains of shadow banking. The first domain deals with the macro-economic fundamentals of the respective shadow banking segments: Why do they exist, what problems do they solve and why are some of their embedded risks so persistent? The second domain captures the global dimensions of shadow banking markets, reviewing the particularities and specifics of various shadow banking systems around the world. Volume II concludes with an extensive overview of how the sector has changed since the financial crisis, focusing on regulatory arbitrage, contract imperfection and governance. Closing on unresolved issues and open-ended questions that will no doubt remain prominent in the shadow banking sector for years to come, this handbook is a must-read for professionals and policy-makers within the banking sector, as well as those researching economics and finance.

Central Bank Independence and Macro-Prudential Regulation

Mr.Kenichi Ueda,Mr.Fabian Valencia
Central Bank Independence and Macro Prudential Regulation Book PDF

Author : Mr.Kenichi Ueda,Mr.Fabian Valencia
Publisher : International Monetary Fund
Page : 27 pages
File Size : 45,9 Mb
Release : 2012-04-01
Category : Business & Economics
ISBN : 9781475581171

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Central Bank Independence and Macro-Prudential Regulation by Mr.Kenichi Ueda,Mr.Fabian Valencia Pdf

We consider the optimality of various institutional arrangements for agencies that conduct macro-prudential regulation and monetary policy. When a central bank is in charge of price and financial stability, a new time inconsistency problem may arise. Ex-ante, the central bank chooses the socially optimal level of inflation. Ex-post, however, the central bank chooses inflation above the social optimum to reduce the real value of private debt. This inefficient outcome arises when macro-prudential policies cannot be adjusted as frequently as monetary. Importantly, this result arises even when the central bank is politically independent. We then consider the role of political pressures in the spirit of Barro and Gordon (1983). We show that if either the macro-prudential regulator or the central bank (or both) are not politically independent, separation of price and financial stability objectives does not deliver the social optimum.

Macroprudential Policy - An Organizing Framework - Background Paper

International Monetary Fund. Monetary and Capital Markets Department
Macroprudential Policy An Organizing Framework Background Paper Book PDF

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 33 pages
File Size : 51,7 Mb
Release : 2011-03-14
Category : Business & Economics
ISBN : 9781498339179

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Macroprudential Policy - An Organizing Framework - Background Paper by International Monetary Fund. Monetary and Capital Markets Department Pdf

MCM conducted a survey in December 2010 to take stock of international experiences with financial stability and the evolving macroprudential policy framework. The survey was designed to seek information in three broad areas: the institutional setup for macroprudential policy, the analytical approach to systemic risk monitoring, and the macroprudential policy toolkit. The survey was sent to 63 countries and the European Central Bank (ECB), including all countries in the G-20 and those subject to mandatory Financial Sector Assessment Programs (FSAPs). The target list is designed to cover a broad range of jurisdictions in all regions, but more weight is given to economies that are systemically important (see Annex for details). The response rate is 80 percent. This note provides a summary of the survey’s main findings.

Shadow Bank Monitoring

Tobias Adrian,Adam B. Ashcraft,Nicola Cetorelli
Shadow Bank Monitoring Book PDF

Author : Tobias Adrian,Adam B. Ashcraft,Nicola Cetorelli
Publisher : Unknown
Page : 35 pages
File Size : 52,8 Mb
Release : 2013-11-17
Category : Electronic
ISBN : 1457849550

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Shadow Bank Monitoring by Tobias Adrian,Adam B. Ashcraft,Nicola Cetorelli Pdf

This report provides a framework for monitoring the shadow banking system, which consists of a web of specialized financial institutions that conduct credit, maturity, and liquidity transformation without direct, explicit access to public backstops. The lack of such access to sources of government liquidity and credit backstops makes shadow banks inherently fragile. Shadow banking activities are often intertwined with core regulated institutions such as bank holding companies, security brokers and dealers, and insurance companies. These interconnections of shadow banks with other financial institutions create sources of systemic risk for the broader financial system. The authors describe elements of monitoring risks in the shadow banking system, including recent efforts by the Financial Stability Board. Figures and tables. This is a print on demand report.

An Overview of Macroprudential Policy Tools

Mr.Stijn Claessens
An Overview of Macroprudential Policy Tools Book PDF

Author : Mr.Stijn Claessens
Publisher : International Monetary Fund
Page : 38 pages
File Size : 53,8 Mb
Release : 2014-12-11
Category : Business & Economics
ISBN : 9781498340939

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An Overview of Macroprudential Policy Tools by Mr.Stijn Claessens Pdf

Macroprudential policies – caps on loan to value ratios, limits on credit growth and other balance sheets restrictions, (countercyclical) capital and reserve requirements and surcharges, and Pigouvian levies – have become part of the policy paradigm in emerging markets and advanced countries alike. But knowledge is still limited on these tools. Macroprudential policies ought to be motivated by market failures and externalities, but these can be hard to identify. They can also interact with various other policies, such as monetary and microprudential, raising coordination issues. Some countries, especially emerging markets, have used these tools and analyses suggest that some can reduce procyclicality and crisis risks. Yet, much remains to be studied, including tools’ costs ? by adversely affecting resource allocations; how to best adapt tools to country circumstances; and preferred institutional designs, including how to address political economy risks. As such, policy makers should move carefully in adopting tools.

Shadow Banking

Zoltan Pozsar
Shadow Banking Book PDF

Author : Zoltan Pozsar
Publisher : Unknown
Page : 16 pages
File Size : 41,7 Mb
Release : 2014
Category : Electronic
ISBN : OCLC:1308904918

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Shadow Banking by Zoltan Pozsar Pdf

The rapid growth of the market-based financial system since the mid-1980s has changed the nature of financial intermediation. Within the system, “shadow banks” have served a critical role, especially in the run-up to the recent financial crisis. Shadow banks are financial intermediaries that conduct maturity, credit, and liquidity transformation without explicit access to central bank liquidity or public sector credit guarantees. This article documents the institutional features of shadow banks, discusses the banks' economic roles, and analyzes their relation to the traditional banking system. The authors argue that an understanding of the “plumbing” of the shadow banking system is an important underpinning for any study of financial system interlinkages. They observe that while many current and future reform efforts are focused on remediating the excesses of the recent credit bubble, increased capital and liquidity standards for depository institutions and insurance companies are likely to heighten the returns to shadow banking activity. Thus, shadow banking is expected to be a significant part of the financial system, although very likely in a different form, for the foreseeable future.

Financial Stability Monitoring

Tobias Adrian,Daniel M. Covitz,Nellie Liang
Financial Stability Monitoring Book PDF

Author : Tobias Adrian,Daniel M. Covitz,Nellie Liang
Publisher : Unknown
Page : 0 pages
File Size : 43,8 Mb
Release : 2020
Category : Electronic
ISBN : OCLC:1375396082

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Financial Stability Monitoring by Tobias Adrian,Daniel M. Covitz,Nellie Liang Pdf

In a recently released New York Fed staff report, we present a forward-looking monitoring program to identify and track time-varying sources of systemic risk.

Staff Guidance Note on Macroprudential Policy

International Monetary Fund
Staff Guidance Note on Macroprudential Policy Book PDF

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 45 pages
File Size : 46,7 Mb
Release : 2014-06-11
Category : Business & Economics
ISBN : 9781498342629

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Staff Guidance Note on Macroprudential Policy by International Monetary Fund Pdf

This note provides guidance to facilitate the staff’s advice on macroprudential policy in Fund surveillance. It elaborates on the principles set out in the “Key Aspects of Macroprudential Policy,” taking into account the work of international standard setters as well as the evolving country experience with macroprudential policy. The main note is accompanied by supplements offering Detailed Guidance on Instruments and Considerations for Low Income Countries

Macro-Prudential Policies to Mitigate Financial System Vulnerabilities

Mr.Stijn Claessens,Swati R. Ghosh,MissRoxana Mihet
Macro Prudential Policies to Mitigate Financial System Vulnerabilities Book PDF

Author : Mr.Stijn Claessens,Swati R. Ghosh,MissRoxana Mihet
Publisher : International Monetary Fund
Page : 36 pages
File Size : 47,8 Mb
Release : 2014-08-19
Category : Business & Economics
ISBN : 9781498357609

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Macro-Prudential Policies to Mitigate Financial System Vulnerabilities by Mr.Stijn Claessens,Swati R. Ghosh,MissRoxana Mihet Pdf

Macro-prudential policies aimed at mitigating systemic financial risks have become part of the policy toolkit in many emerging markets and some advanced countries. Their effectiveness and efficacy are not well-known, however. Using panel data regressions, we analyze how changes in balance sheets of some 2,800 banks in 48 countries over 2000–2010 respond to specific macro-prudential policies. Controlling for endogeneity, we find that measures aimed at borrowers––caps on debt-to-income and loan-to-value ratios––and at financial institutions––limits on credit growth and foreign currency lending––are effective in reducing asset growth. Countercyclical buffers are little effective through the cycle, and some measures are even counterproductive during downswings, serving to aggravate declines, consistent with the ex-ante nature of macro-prudential tools.