Shedding Light on Shadow Banking

Artak Harutyunyan, Alexander Massara, Giovanni Ugazio, Goran Amidžic and Richard Walton

No 2015/001, IMF Working Papers from International Monetary Fund

Abstract: In this paper, we develop an alternative approach to estimate the size of the shadow banking system, using official data reported to the IMF complemented by other data sources. We base our alternative approach on the expansion of the noncore liabilities concept developed in recent literature to encompass all noncore liabilities of both bank and nonbank financial institutions. As opposed to existing measures of shadow banking, our newly developed measures capture nontraditional funding raised by traditional banks. We apply the new approach to 26 jurisdictions and analyze the results over a twelve-year span. We find that noncore liabilities are procyclical and display more volatility than core liabilities for most jurisdictions in the sample. We also compare our measures to existing measures, such as the measure developed by the Financial Stability Board. Our approach can be replicated over time using internationally-comparable data and thus may serve as an operational tool for IMF surveillance and policy analysis.

Keywords: WP; noncore liability; core funding; intra-SBS position; liabilities measure; funding structure; shadow banking; noncore liabilities; financial intermediation; SBS position; Noncore ratio indicator; funding source; Nonbank financial institutions; Securities; Global; Africa (search for similar items in EconPapers)
Pages: 43
Date: 2015-01-05
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Citations: View citations in EconPapers (19)

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