Shadow banks and macroeconomic instability

Roland Meeks, Benjamin Nelson and Piergiorgio Alessandri

No 939, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We develop a macroeconomic model in which commercial banks can offload risky loans onto a �shadow� banking sector and financial intermediaries trade in securitized assets. We analyze the responses of aggregate activity, credit supply and credit spreads to business cycle and financial shocks. We find that interactions and spillover effects between financial institutions affect credit dynamics, that high leverage in the shadow banking system heightens the economy�s vulnerability to aggregate disturbances, and that following a financial shock, a stabilization policy aimed solely at the securitization markets is relatively ineffective.

Keywords: shadow banks; securitization; financial accelerator (search for similar items in EconPapers)
JEL-codes: E32 E44 E58 G23 (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-ban, nep-cba, nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.bancaditalia.it/pubblicazioni/temi-disc ... 0939/en_tema_939.pdf (application/pdf)

Related works:
Journal Article: Shadow Banks and Macroeconomic Instability (2017)
Working Paper: Shadow banks and macroeconomic instability (2014)
Working Paper: Shadow banks and macroeconomic instability (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_939_13

Access Statistics for this paper

More papers in Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC.
Bibliographic data for series maintained by (angela.barbaro@bancaditalia.it).