Coexistence of Banks and Non-Banks: Intermediation Functions and Strategies

Nicola Cetorelli, Gonzalo Cisternas and Asani Sarkar
Additional contact information
Gonzalo Cisternas: https://www.newyorkfed.org/research/economists/cisternas

No 1145, Staff Reports from Federal Reserve Bank of New York

Abstract: What is the essence of non-bank financial intermediation? How does it emerge and interact with intermediation performed by banks? To investigate these questions, we develop a model-based survey: we classify existing models into different intermediation functions á la Merton (1995) to show that variations of them admit a common modeling structure; then, we extend or reinterpret the resulting models to connect equilibrium strategies to non-bank activities in practice. Particular emphasis is placed on the coexistence of banks and non-banks: how their competition, or the extent of cooperation through contractual arrangements, varies across intermediation functions. Through this approach we speak to a variety of entities such as traditional banks, open-end funds, special purpose vehicles, private credit entities, and fintech lenders. We also discuss innovation, regulation, and market liquidity as drivers of non-bank activities.

Keywords: Non-banks; banks; financial intermediation (search for similar items in EconPapers)
JEL-codes: G18 G21 G23 (search for similar items in EconPapers)
Pages: 50
Date: 2025-03-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr1145.pdf Full text (application/pdf)
https://www.newyorkfed.org/research/staff_reports/sr1145.html Summary (text/html)

Related works:
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:fip:fednsr:99720

Ordering information: This working paper can be ordered from

DOI: 10.59576/sr.1145

Access Statistics for this paper

More papers in Staff Reports from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().