The Perils Of International Regime Complexity In Shadow Banking

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The Perils of International Regime Complexity in Shadow Banking

Lucia Quaglia
The Perils of International Regime Complexity in Shadow Banking Book PDF

Author : Lucia Quaglia
Publisher : Oxford University Press
Page : 241 pages
File Size : 50,7 Mb
Release : 2022-05-26
Category : Political Science
ISBN : 9780192691705

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The Perils of International Regime Complexity in Shadow Banking by Lucia Quaglia Pdf

Despite the role of shadow banking in the building up of the 2008 international financial crisis, the massive size of this sector, its cross-border nature, and the risks it entails for financial stability, the post-crisis regulation of shadow banking has remained rather feeble. Why? The Perils of International Regime Complexity in Shadow Banking identifies a 'game of shadows', which unfolded recursively concerning the definition, monitoring, and regulation of shadow banking internationally. Thus, states, regulators, and private actors tended to cast light away from various parts of the shadow banking system - shadow banking was (re)fined over time, its measurement was narrowed down, lessening the (perceived) need for regulation. The playing out of such a game was facilitated by the international architecture for shadow banking governance, which is a 'regime complex' characterized by the presence of multiple institutions and elemental regimes governing a set of related issues. Indeed, shadow banking is a quintessential case for demonstrating the perils of international regime complexity, which magnifies problems that are endemic in governing global finance - namely, interstate competition, disagreement between technocratic bodies, and the power of the financial industry - while splintering solutions, due to the fragmentation of regulatory authority. Empirically, this book examines various elemental regimes concerning different aspects of shadow banking, namely: international standards for defining, measuring, and monitoring global shadow banking; international standards for shadow banking entities, including money market funds, hedge funds, and investment funds; international standards for shadow banking activities, such as securitization, securities lending, and repos; international standards for bank capital exposures to shadow banking.

Shadow Banking and Market-Based Finance

Tobias Adrian,Bradley Jones
Shadow Banking and Market Based Finance Book PDF

Author : Tobias Adrian,Bradley Jones
Publisher : International Monetary Fund
Page : 47 pages
File Size : 49,7 Mb
Release : 2018-08-01
Category : Business & Economics
ISBN : 9781484343883

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Shadow Banking and Market-Based Finance by Tobias Adrian,Bradley Jones Pdf

Variants of nonbank credit intermediation differ greatly. We provide a conceptual framework to help distinguish various characteristics—structural features, economic motivations, and risk implications—associated with different forms of nonbank credit intermediation. Anchored by this framework, we take stock of the evolution of shadow banking and the extent of its transformation into market-based finance since the global financial crisis. In light of the substantial regulatory and supervisory responses of recent years, we highlight key areas of progress while drawing attention to elements where work still needs to be done. Case studies of policy challenges arising in different jurisdictions are also discussed. While many of the amplification forces that were at play during the global financial crisis have diminished, the post-crisis reform agenda is not yet complete, and policy makers must remain attentive to new challenges looming on the horizon.

Creating a Safer Financial System

José Vinãls,Ceyla Pazarbasioglu,Jay Surti,Aditya Narain,Mrs.Michaela Erbenova,Mr.Julian T. S. Chow
Creating a Safer Financial System Book PDF

Author : José Vinãls,Ceyla Pazarbasioglu,Jay Surti,Aditya Narain,Mrs.Michaela Erbenova,Mr.Julian T. S. Chow
Publisher : International Monetary Fund
Page : 27 pages
File Size : 53,6 Mb
Release : 2013-05-14
Category : Business & Economics
ISBN : 9781484340943

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Creating a Safer Financial System by José Vinãls,Ceyla Pazarbasioglu,Jay Surti,Aditya Narain,Mrs.Michaela Erbenova,Mr.Julian T. S. Chow Pdf

The U.S., the U.K., and more recently, the E.U., have proposed policy measures directly targeting complexity and business structures of banks. Unlike other, price-based reforms (e.g., Basel 3 and G-SIFI surcharges), these proposals have been developed unilaterally with material differences in scope, design and implementation schedules. This may exacerbate cross-border regulatory arbitrage and put a further burden on consolidated supervision and cross-border resolution. This paper provides an analysis of the potential implications of implementing different structural policy measures. It proposes a pragmatic and coordinated approach to development of these policies to reduce risk of regulatory arbitrage and minimize unintended consequences. In doing so, it also aims to identify a set of common policy measures that countries could adopt to re-scope bank business models and corporate structures.

What is Shadow Banking?

Mr.Stijn Claessens,Mr.Lev Ratnovski
What is Shadow Banking Book PDF

Author : Mr.Stijn Claessens,Mr.Lev Ratnovski
Publisher : International Monetary Fund
Page : 16 pages
File Size : 54,5 Mb
Release : 2014-02-11
Category : Business & Economics
ISBN : 9781475597943

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What is Shadow Banking? by Mr.Stijn Claessens,Mr.Lev Ratnovski Pdf

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.

Canada

International Monetary Fund. Monetary and Capital Markets Department
Canada Book PDF

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 85 pages
File Size : 45,9 Mb
Release : 2019-06-24
Category : Business & Economics
ISBN : 9781498321112

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Canada by International Monetary Fund. Monetary and Capital Markets Department Pdf

This Financial System Stability Assessment paper discusses that Canada has enjoyed favorable macroeconomic outcomes over the past decades, and its vibrant financial system continues to grow robustly. However, macrofinancial vulnerabilities—notably, elevated household debt and housing market imbalances—remain substantial, posing financial stability concerns. Various parts of the financial system are directly exposed to the housing market and/or linked through housing finance. The financial system would be able to manage severe macrofinancial shocks. Major deposit-taking institutions would remain resilient, but mortgage insurers would need additional capital in a severe adverse scenario. Housing finance is broadly resilient, notwithstanding some weaknesses in the small non-prime mortgage lending segment. Although banks’ overall capital buffers are adequate, additional required capital for mortgage exposures, along with measures to increase risk-based differentiation in mortgage pricing, would be desirable. This would help ensure adequate through-the cycle buffers, improve mortgage risk-pricing, and limit procyclical effects induced by housing market corrections.

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 : 52,5 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.

Governance of International Banking

Dirk Schoenmaker
Governance of International Banking Book PDF

Author : Dirk Schoenmaker
Publisher : Oxford University Press
Page : 238 pages
File Size : 41,8 Mb
Release : 2013-03-05
Category : Business & Economics
ISBN : 9780199971619

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Governance of International Banking by Dirk Schoenmaker Pdf

Global governance of international banks is breaking down after the Great Financial Crisis, as national regulators are withdrawing on their home turf. New evidence presented illustrates that the global systemically important banks underpin the global financial system. This book offers solutions for the effective governance of global banks.

Global Waves of Debt

M. Ayhan Kose,Peter Nagle,Franziska Ohnsorge,Naotaka Sugawara
Global Waves of Debt Book PDF

Author : M. Ayhan Kose,Peter Nagle,Franziska Ohnsorge,Naotaka Sugawara
Publisher : World Bank Publications
Page : 403 pages
File Size : 40,6 Mb
Release : 2021-03-03
Category : Business & Economics
ISBN : 9781464815454

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Global Waves of Debt by M. Ayhan Kose,Peter Nagle,Franziska Ohnsorge,Naotaka Sugawara Pdf

The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.

The Regulatory Responses to the Global Financial Crisis

Mr.Stijn Claessens,Ms.Laura E. Kodres
The Regulatory Responses to the Global Financial Crisis Book PDF

Author : Mr.Stijn Claessens,Ms.Laura E. Kodres
Publisher : International Monetary Fund
Page : 39 pages
File Size : 40,9 Mb
Release : 2014-03-14
Category : Business & Economics
ISBN : 9781484336656

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The Regulatory Responses to the Global Financial Crisis by Mr.Stijn Claessens,Ms.Laura E. Kodres Pdf

We identify current challenges for creating stable, yet efficient financial systems using lessons from recent and past crises. Reforms need to start from three tenets: adopting a system-wide perspective explicitly aimed at addressing market failures; understanding and incorporating into regulations agents’ incentives so as to align them better with societies’ goals; and acknowledging that risks of crises will always remain, in part due to (unknown) unknowns – be they tipping points, fault lines, or spillovers. Corresponding to these three tenets, specific areas for further reforms are identified. Policy makers need to resist, however, fine-tuning regulations: a “do not harm” approach is often preferable. And as risks will remain, crisis management needs to be made an integral part of system design, not relegated to improvisation after the fact.

Risk Management and Regulation

Tobias Adrian
Risk Management and Regulation Book PDF

Author : Tobias Adrian
Publisher : International Monetary Fund
Page : 53 pages
File Size : 45,7 Mb
Release : 2018-08-01
Category : Business & Economics
ISBN : 9781484343913

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Risk Management and Regulation by Tobias Adrian Pdf

The evolution of risk management has resulted from the interplay of financial crises, risk management practices, and regulatory actions. In the 1970s, research lay the intellectual foundations for the risk management practices that were systematically implemented in the 1980s as bond trading revolutionized Wall Street. Quants developed dynamic hedging, Value-at-Risk, and credit risk models based on the insights of financial economics. In parallel, the Basel I framework created a level playing field among banks across countries. Following the 1987 stock market crash, the near failure of Salomon Brothers, and the failure of Drexel Burnham Lambert, in 1996 the Basel Committee on Banking Supervision published the Market Risk Amendment to the Basel I Capital Accord; the amendment went into effect in 1998. It led to a migration of bank risk management practices toward market risk regulations. The framework was further developed in the Basel II Accord, which, however, from the very beginning, was labeled as being procyclical due to the reliance of capital requirements on contemporaneous volatility estimates. Indeed, the failure to measure and manage risk adequately can be viewed as a key contributor to the 2008 global financial crisis. Subsequent innovations in risk management practices have been dominated by regulatory innovations, including capital and liquidity stress testing, macroprudential surcharges, resolution regimes, and countercyclical capital requirements.

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 : 52,7 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.

Making Banks Safer

Mr.Julian T. S. Chow,Jay Surti
Making Banks Safer Book PDF

Author : Mr.Julian T. S. Chow,Jay Surti
Publisher : International Monetary Fund
Page : 36 pages
File Size : 50,7 Mb
Release : 2011-10-01
Category : Business & Economics
ISBN : 9781463922023

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Making Banks Safer by Mr.Julian T. S. Chow,Jay Surti Pdf

This paper assesses proposals to redefine the scope of activities of systemically important financial institutions. Alongside reform of prudential regulation and oversight, these have been offered as solutions to the too-important-to-fail problem. It is argued that while the more radical of these proposals such as narrow utility banking do not adequately address key policy objectives, two concrete policy measures - the Volcker Rule in the United States and retail ring-fencing in the United Kingdom - are more promising while still entailing significant implementation challenges. A risk factor common to all the measures is the potential for activities identified as too risky for retail banks to migrate to the unregulated parts of the financial system. Since this could lead to accumulation of systemic risk if left unchecked, it appears unlikely that any structural engineering will lessen the policing burden on prudential authorities and on the banks.

Shadow Banking System

Tobias Adrian
Shadow Banking System Book PDF

Author : Tobias Adrian
Publisher : DIANE Publishing
Page : 16 pages
File Size : 49,9 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.

Ruling Ideas

Cornel Ban
Ruling Ideas Book PDF

Author : Cornel Ban
Publisher : Oxford University Press
Page : 336 pages
File Size : 55,5 Mb
Release : 2016-06-16
Category : Political Science
ISBN : 9780190620103

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Ruling Ideas by Cornel Ban Pdf

Neoliberal economic theories are powerful because their domestic translators make them go local, hybridizing global scripts with local ideas. This does not mean that all local translations shape policy, however. External constraints and translators' access to cohesive policy institutions filter what kind of neoliberal hybrids become policy reality. By comparing the moderate neoliberalism that prevails in Spain with the more radical one that shapes policy thinking in Romania, Ruling Ideas explains why neoliberal hybrids take the forms that they do and how they survive crises. Cornel Ban contributes to the literature by showing that these different varieties of neoliberalism depend on what competing ideas are available locally, on the networks of actors who serve as the local advocates of neoliberalism, and on their vulnerability to external coercion. Ruling Ideas covers an extended historical period, starting with the Franco period in Spain and the Ceausescu period in Romania, discusses the economic integration of these countries into the EU, and continues through Europe's Great Recession and the European debt crisis. The broad historical coverage enables a careful analysis of how neoliberalism rules in times of stability and crisis and under different political systems.

Bank Capital

Ouarda Merrouche,Ms. Enrica Detragiache,Asli Demirgüç-Kunt
Bank Capital Book PDF

Author : Ouarda Merrouche,Ms. Enrica Detragiache,Asli Demirgüç-Kunt
Publisher : International Monetary Fund
Page : 38 pages
File Size : 47,9 Mb
Release : 2010-12-01
Category : Business & Economics
ISBN : 9781455254873

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Bank Capital by Ouarda Merrouche,Ms. Enrica Detragiache,Asli Demirgüç-Kunt Pdf

Using a multi-country panel of banks, we study whether better capitalized banks experienced higher stock returns during the financial crisis. We differentiate among various types of capital ratios: the Basel risk-adjusted ratio; the leverage ratio; the Tier I and Tier II ratios; and the tangible equity ratio. We find several results: (i) before the crisis, differences in capital did not have much impact on stock returns; (ii) during the crisis, a stronger capital position was associated with better stock market performance, most markedly for larger banks; (iii) the relationship between stock returns and capital is stronger when capital is measured by the leverage ratio rather than the risk-adjusted capital ratio; (iv) higher quality forms of capital, such as Tier 1 capital and tangible common equity, were more relevant.