EconPapers    
Economics at your fingertips  
 

Shadow banks and macroeconomic instability

Roland Meeks, Benjamin Nelson () and Piergiorgio Alessandri

No 487, Bank of England working papers from Bank of England

Abstract: We develop a macroeconomic model in which commercial banks can offload risky loans to a ‘shadow’ banking sector, and financial intermediaries trade in securitised assets. We analyse 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; high leverage in the shadow banking system makes the economy excessively vulnerable to aggregate disturbances; and following a financial shock, stabilisation policy aimed solely at the securitisation markets is relatively ineffective.

Keywords: Business fluctuations; shadow banks; credit; securitisation (search for similar items in EconPapers)
JEL-codes: E32 E50 G20 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2014-03-28
New Economics Papers: this item is included in nep-ban, nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
https://www.bankofengland.co.uk/-/media/boe/files/ ... FF68AC8DB6E97FAF80AE Full text (application/pdf)

Related works:
Journal Article: Shadow Banks and Macroeconomic Instability (2017) Downloads
Working Paper: Shadow banks and macroeconomic instability (2013) Downloads
Working Paper: Shadow banks and macroeconomic instability (2013) Downloads
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:boe:boeewp:0487

Access Statistics for this paper

More papers in Bank of England working papers from Bank of England Bank of England, Threadneedle Street, London, EC2R 8AH. Contact information at EDIRC.
Bibliographic data for series maintained by Digital Media Team ().

 
Page updated 2020-07-09
Handle: RePEc:boe:boeewp:0487