Shadow banking: A review of the literature

Arbeitspapier

We provide an overview of the rapidly evolving literature on shadow credit intermediation. The shadow banking system 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. Much of shadow banking activities is intertwined with the operations of core regulated institutions such as bank holding companies and insurance companies, thus creating a source of systemic risk for the financial system at large. We review fundamental reasons for the existence of shadow banking, explain the functioning of shadow banking institutions and activities, discuss why shadow banks need to be regulated, and review the impact of recent reform efforts on shadow banking credit intermediation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Staff Report ; No. 580

Classification and Topics

• Classification: Wirtschaft ; Financial Markets and the Macroeconomy ; Financial Economics: General ; Financial Crises ; Financial Institutions and Services: Government Policy and Regulation
• Subject: shadow banking ; financial intermediation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Adrian, Tobias ; Ashcraft, Adm B.
• Event: Veröffentlichung
• (who): Federal Reserve Bank of New York
• (where): New York, NY
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/93632
• Last update: 10.03.2025, 11:44 AM CET