Shadow Banking – Developments in Times of Financial Crisis

Bogdan Munteanu ()
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Bogdan Munteanu: National School of Political and Administrative Studies

Ovidius University Annals, Economic Sciences Series, 2016, vol. XVI, issue 2, 42-48

Abstract: “Shadow Banking†phenomenon discussed in this paper aims at revealing trends in thefinancial industry, providing a view upon the shift of classic banking activities towards a process ofactivities fragmentation via non-bank financial entities that resort to bridging differentials inmaturities of various financial products, to liquidity transformation and lending, without havingaccess to lender of the last resort’s liquidity (central banks) or insurance safety net of asset sources(Deposit Insurance and Guarantee). The paper considers the following entities and activities, without limitation to or completenessof viewpoints: finance companies, asset backed financial instruments, structured investments,financing vehicles, money market funds, asset managers, credit hedge funds and venture capital,providing characteristics of shadow banking and their economic functions relative to the classicbanking system, as they pose a systemic risk due to asymmetric information and gaps created inmatching liquidity tenures with duration, by using synthetic leverage finance.

Keywords: asset management; financial intermediation; investment funds; market liquidity; shadow banking (search for similar items in EconPapers)
JEL-codes: G23 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xvi:y:2016:i:2:p:42-48

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