Shadow banking: Economics and policy priorities
Stijn Claessens, Zoltan Pozsar, Lev Ratnovski, Manmohan Singh 12 January 2013
The risks associated with shadow banking are at the forefront of the regulatory debate. Yet, this column argues that there is as yet no established analytical approach to shadow banking. This means that policy priorities are not clearly motivated. But if we analyse securitisation and collateral intermediation – the two shadow banking functions most important for financial stability – a solid framework that includes existing policy recommendations, as well as some alternative ones, begins to emerge.
This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?"
securitisation, financial deregulation, shadow banking, collateral intermediation