Shadow Banking in the Euro Area: An Overview

Abstract

In 2012 all ECB publications feature a motif taken from the €50 banknote.

Macroprudential regulation and leakage to the shadow banking sector

“…Furthermore, we ensure in the calibration that the share of shadow bank intermediation in total intermediation is approximately one-third in steady state and that the size of the average shadow bank loan portfolio is one-third the size of shadow bank assets. These values are comparable to statistical figures derived in empirical studies in the euro area shadow banking sector based on similar data (Bakk-Simon et al, 2012;Malatesta et al, 2016) and resemble average values in our data set. The latter calibration allows us to treat σ S as a transformed parameter in the estimation, and the resulting post-estimation value is given by 0.944.…”

“…More precisely, we follow the institutional approach employed by ECB staff to apply the FSB broad defintion to available euro area data (Malatesta et al, 2016;Doyle et al, 2016;Bakk-Simon et al, 2012). The core of this approach depicts the use of the "Other Financial Intermediaries" (OFIs) aggregate in the Eurosystem's financial accounts data.…”

Shadow banking versus secondary shadow banking – The case of Hungary

“…However, due to the bank-based nature of the European financial system, compared to traditional bank assets SB assets still played a less significant role in European financial intermediation than in that of the US. Accordingly, despite the significant growth of the European SB system, the financial system in Europe remained less exposed to SB developments (Bakk-Simon et al 2012;Malatesta et al 2016). As factors for the growth of EU SBusing dynamic panel regression - Hodula et al (2020) identify real GDP growth, the demand of institutional investors, tightening capital requirements of banks and the financial development of EU member states.…”

A Network Analysis of Sectoral Accounts: Identifying Sectoral Interlinkages in G-4 Economies

“…Second, sectoral accounts data have also been used to track balance sheets of different economic sectors, particularly the shadow banking industry (nonbank financial institutions). Bakk-Simon et al (2012) use sectoral accounts data to measure the size of shadow banking and its interconnections with the traditional banking sector. Errico et al (2014) go one step further by combining sectoral accounts data with IIP, CDIS, CPIS, and BIS data to analyze the U.S. shadow banking sector by breaking down its claims and liabilities by counterparty country and sector.…”