EconPapers    
Economics at your fingertips  
 

The Macroeconomics of Shadow Banking

Alan Moreira and Alexi Savov

No 20335, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We build a macroeconomic model that centers on liquidity transformation in the financial sector. Intermediaries maximize liquidity creation by issuing securities that are money-like in normal times but become illiquid in a crash when collateral is scarce. We call this process shadow banking. A rise in uncertainty raises demand for crash-proof liquidity, forcing intermediaries to delever and substitute toward safe, collateral- intensive liabilities. Shadow banking shrinks, causing the liquidity supply to contract, discount rates and collateral premia spike, prices and investment fall. The model produces slow recoveries, collateral runs, and flight to quality and it provides a framework for analyzing unconventional monetary policy and regulatory reform proposals.

JEL-codes: E44 E52 G01 G21 G23 (search for similar items in EconPapers)
Date: 2014-07
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac and nep-mon
Note: AP EFG ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

Published as ALAN MOREIRA & ALEXI SAVOV, 2017. "The Macroeconomics of Shadow Banking," The Journal of Finance, vol 72(6), pages 2381-2432.

Downloads: (external link)
http://www.nber.org/papers/w20335.pdf (application/pdf)

Related works:
Working Paper: The Macroeconomics of Shadow Banking (2014) 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:nbr:nberwo:20335

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w20335

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-31
Handle: RePEc:nbr:nberwo:20335