Non-banking financial intermediation and phenomena of shadow money in modern economy

2021 ◽  
Vol 27 (8) ◽  
pp. 1694-1709
Author(s):  
Vladimir K. BURLACHKOV
Keyword(s):  
Commercial Banks ◽  
Financial Intermediation ◽  
Banking System ◽  
Banking Regulation ◽  
Developed Countries ◽  
Bank Credit ◽  
Shadow Banking ◽  
Economic Agents ◽  
Shadow Banking System ◽  
Lending Activity

Subject. The article addresses the non-banking financial intermediation (shadow banking system) as it is successfully expanding nowadays both in developed countries and emerging economics. Objectives. The study aims at conducting a comprehensive analysis of the specifics of non-banking financial intermediation, revealing its impact on economic agents’ activities, causes and consequences, and elaborating the methodological framework for effectiveness of modern monetary policy. Methods. I employ methods of scientific abstraction, induction, deduction, synthesis, and comparative analysis. Results. In the modern national economy, along with the money, created by the central bank and commercial banks, there are highly liquid financial instruments called shadow money. The scope of its application is shadow banking (financial intermediation) outside the banking system. The use of shadow money is caused by high demand for credit resources. Conclusions. The high activity of shadow banking and increased turnover of shadow money resulted from a transfer to Basel standards of banking regulation in the 1990s, which affected the lending activity of commercial banks. Under these conditions, the demand for loans provided by non-bank credit and financial institutions increased. The market of non-bank credit products was formed. However, the process of lending in the shadow banking is associated with high risks and non-stability of shadow money, widely used in this sphere.

Funny Money or Legitimate Finance? Shadow Banking and Policy Impacts in China

2021 ◽  
pp. 000276422110200
Author(s):  
Sara Hsu ◽  
Xun Han
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Financial System ◽  
Financial Sector ◽  
Banking Regulation ◽  
Shadow Banking ◽  
Data Set ◽  
Money Flows ◽  
Shadow Banking System ◽  
The Impact

Government officials in China have taken different views regarding shadow banking. Some have seen the industry as overly risky, potentially undermining the formal financial system, while others have asserted that it is an increasingly important part of the financial system, filling a gap in finance provision to particular sectors and smaller firms. Do their views matter? Regulators have striven to crack down on the riskiest practices in shadow banking, but are the policies effective? In this article, we analyze the impact of government attitudes and actions on the shadow banking sector. Using a unique data set based on information collected from various sources in a difference-in-difference model, we find that shadow banking regulation plays a strong role in China’s financial sector, while contradictory government views (in the form of commentary in the People’s Daily) on shadow banking do not. This reveals that shadow banking is strongly affected by political authority when it is codified into regulation. Only some aspects of shadow banking can be legitimized through regulation, while the remainder of China’s financial system remains constrained due to state dominance over the financial sector. This underscores the “funny” nature of shadow banking’s money flows. This article is one of the first to study the effects of government views and regulations on the shadow banking system.

The Safe-Asset Share

2012 ◽  
Vol 102 (3) ◽  
pp. 101-106 ◽  
Author(s):  
Gary Gorton ◽  
Stefan Lewellen ◽  
Andrew Metrick
Keyword(s):  
Commercial Banks ◽  
Banking System ◽  
Shadow Banking ◽  
Stylized Facts ◽  
Time Period ◽  
Shadow Banking System

We document that the percentage of all U.S. assets that are “safe” has remained stable at about 33 percent since 1952. This stable ratio is a rare example of calm in a rapidly changing financial world. Over the same time period, the ratio of U.S. assets to GDP has increased by a factor of 2.5, and the main supplier of safe financial debt has shifted from commercial banks to the “shadow banking system.” We analyze this pattern of stylized facts and offer some tentative conclusions about the composition of the safe-asset share and its role within the overall economy.

Alcune considerazioni sullo Shadow Banking System

2012 ◽  
pp. 69-87
Author(s):  
Figuera Stefano
Keyword(s):  
Financial Crisis ◽  
Systemic Risk ◽  
Financial Intermediation ◽  
Banking System ◽  
Shadow Banking ◽  
Production Theory ◽  
Recent Period ◽  
Capitalist Economy ◽  
Efficient Control ◽  
Shadow Banking System

The financial intermediation system has been characterized by the emergence of new subjects and instruments modifying its organization. The development of the shadow banking system parallel to the traditional one has led to the demand, during the recent period of financial crisis, for a more efficient control to weather the growing systemic risk. This changing context leads the Author to consider some essential profiles of the monetary nature of the capitalist economy. Specifically, a need is perceived to reinterpret recent events in the light of the credit nature of money and the endogenous character of its supply, aspects on which scholars of the Keynesian school have long focused their attention. The Author considers particularly useful the indications deriving from the monetary production theory, especially with reference to the distinction among the various forms of financing, to understand such changes and adopt suitable strategies to handle them.

scholarly journals The Research on Shadow Banking System in China

2019 ◽  
Vol 2 (4) ◽  
Author(s):  
Xu Chen ◽  
Shuwen Chen
Keyword(s):  
Commercial Banks ◽  
Banking System ◽  
Financial System ◽  
Financial Resources ◽  
Shadow Banking ◽  
Supply Side ◽  
Special Period ◽  
Fundamental Change ◽  
Shadow Banking System ◽  
Global Financial System

The shadow banking system has grown stronger in the process of evading supervision. Together with traditional commercial banks, it has become an important participant in the financial system, which has caused a fundamental change in the structure of the global financial system. As an exogenous reform force in China’s special period, Shadow Bank has become an important channel for financial resources to “disconnect from reality”. Despite the lack of substantial securitization, China’s shadow banking system has developed rapidly. This paper analyzes the development motivation.This paper believes that the scope of China’s shadow banking system can be defined according to the nature of the fund supply side.

Exploring the Dynamic Relationship in the Shadow Banking System

2016 ◽  
Author(s):  
Majid Haghani Rizi ◽  
Narayan K. Kishor ◽  
Hardik Marfatia
Keyword(s):  
Banking System ◽  
Shadow Banking ◽  
Dynamic Relationship ◽  
Shadow Banking System

scholarly journals Competitive Advantages of Shadow Banking Industry: An Analysis Using Porter Diamond Model

2015 ◽  
Vol 6 (2) ◽  
pp. 15 ◽  
Author(s):  
Arash Riasi
Keyword(s):  
Systemic Risk ◽  
Banking Industry ◽  
Banking System ◽  
Firm Strategy ◽  
The Other ◽  
Shadow Banking ◽  
Competitive Advantages ◽  
Diamond Model ◽  
Shadow Banking System ◽  
Global Financial System

<p>This paper tries to find out why shadow banking system has become so competitive in the global financial system and how it can be controlled. For this reason we use Porter’s diamond model to find the competitive advantages of shadow banking. Based on the results of this study it can be concluded that factor conditions, chance and government do not contribute to the competitiveness of shadow banking industry. On the other hand the results suggested that related and supporting industries, firm strategy, structure and rivalry, and demand conditions contribute to the competitiveness of shadow banking industry. It is important to regulate the activities of shadow banking industry in order to prevent this industry from creating systemic risk.</p>

scholarly journals The (Sizable) Role of Rehypothecation in the Shadow Banking System

2010 ◽  
Vol 10 (172) ◽  
pp. 1 ◽  
Author(s):  
Manmohan Singh ◽  
James Aitken ◽  
◽  
Keyword(s):  
Banking System ◽  
Shadow Banking ◽  
Shadow Banking System

USE OF INFORMATION TECHNOLOGIES IN THE DEVELOPMENT OF INNOVATIVE ACTIVITIES OF COMMERCIAL BANKS

2021 ◽  
Vol 4 (3) ◽  
pp. 22-31
Author(s):  
Jamshid Kiryigitov ◽  
Keyword(s):  
Commercial Banks ◽  
Information Technologies ◽  
Banking System ◽  
Digital Technologies ◽  
Developed Countries ◽  
Current Situation ◽  
Innovative Development ◽  
Urgent Task ◽  
Effective Use ◽  
Positive Results

In this article shown the activities and experience of commercial banks of developed countries are studied and prospects of using information technologies in the development of innovative activities in the system of our national commercial banks. At the same time, opinions were expressedabout the possibility of achieving positive results using digital technologies on the basis of developmentof innovative activities of banks of Uzbekistan. Proceeding from this urgent task, the article developed proposals and conclusions on the coverage of the importance of innovative development of banking activities, theoretical views of our homeland and foreign scientists on this and the analysis of the current situation on innovative development of the banking system, as well as on the wide use of information technologies in the innovative development of banks. The opportunities are highlighted for innovative development of the banking system with the effective use of digital technologies

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