Shedding Light on Shadow Banking

By Artak Harutyunyan, Alexander Massara, Giovanni Ugazio, Goran Amidžic, Richard Walton

January 5, 2015

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Artak Harutyunyan, Alexander Massara, Giovanni Ugazio, Goran Amidžic, and Richard Walton. Shedding Light on Shadow Banking, (USA: International Monetary Fund, 2015) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

In this paper, we develop an alternative approach to estimate the size of the shadow banking system, using official data reported to the IMF complemented by other data sources. We base our alternative approach on the expansion of the noncore liabilities concept developed in recent literature to encompass all noncore liabilities of both bank and nonbank financial institutions. As opposed to existing measures of shadow banking, our newly developed measures capture nontraditional funding raised by traditional banks. We apply the new approach to 26 jurisdictions and analyze the results over a twelve-year span. We find that noncore liabilities are procyclical and display more volatility than core liabilities for most jurisdictions in the sample. We also compare our measures to existing measures, such as the measure developed by the Financial Stability Board. Our approach can be replicated over time using internationally-comparable data and thus may serve as an operational tool for IMF surveillance and policy analysis.

Subject: Banking, Financial crises, Financial institutions, Financial instruments, Financial services, Nonbank financial institutions, Securities, Shadow banking

Keywords: Africa, Core funding, Financial intermediation, Funding source, Funding structure, Global, Intra-SBS position, Liabilities measure, Nonbank financial institutions, Noncore liabilities, Noncore liability, Noncore ratio indicator, SBS position, Securities, Shadow banking, WP

Publication Details

Pages:

43
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/001
Stock No:

WPIEA2015001
ISBN:

9781498391788
ISSN:

1018-5941

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