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2016 | Buch

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The Shadow Banking System

Creating Transparency in the Financial Markets

verfasst von: Valerio Lemma

Verlag: Palgrave Macmillan UK

Buchreihe : Palgrave Macmillan Studies in Banking and Financial Institutions

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

The book shows the fundaments of the shadow banking system and its entities, operations and risks. Focusing on the regulatory aspects, it provides an original view that is able to demonstrate that the lack of supervision is a market failure.

Inhaltsverzeichnis

Frontmatter

Introduction

Abstract

A clear definition of the phenomenon under observation, shadow banking, is not appropriate at the beginning of an analysis like the following. After all, we are dealing not with the essence of the banking business, but with the conditions and the effects of capital circulation. As the following pages of this book will show, the external course of the shadow banking system is multidimensional, and hence we will be able to understand its features and risks by analyzing the concrete evidence of experience.

Valerio Lemma

1. General Observations

Abstract

Under a regulatory approach, this chapter will address the questions about the definition of the shadow banking system and its basic elements.

Valerio Lemma

2. The Shadow Banking System as an Alternative Source of Liquidity

Abstract

This chapter considers the key economic drivers of shadow banking. It begins by examining the efficiencies of this system, that are the rationale for the bundling of activities that we define as market-based financing. The chapter goes on to take into account the market failures amplified by the shadows, focusing on asymmetric information, lack of transparency, and market instability.

Valerio Lemma

3. Shadow Banking Entities

Abstract

By shadow banking entities, I refer to the subjects operating in the process that transforms “loans to real economy” into “financial instruments” (see Table 3.1).

Valerio Lemma

4. Shadow Business of Banks, Insurance Companies, and Pension Funds

Abstract

In this chapter, the focus is on the role played by the commercial and merchant banks in the shadows, and I identify the need for accurate internal controls designed to avoid excessive risk taking and moral hazards.

Valerio Lemma

5. Shadow Banking Operations

Abstract

This chapter chiefly concerns the analysis of the shadow credit intermediation process, but the main purpose remains dealing with difficulties of the credit transformations, in order to understand the allocation of risks and benefits among the shadow banking entities.

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6. Non-Standard Operations in the Shadow Banking System

Abstract

This chapter will consider the problems related to the issuing of ABCPs, ABSs, and CDOs. Before that, I clarify that the use of securities lending and borrowing or other agreements is connected with the process velocity (in circulating the money), then must be monitored by the monetary authorities.

Valerio Lemma

7. Shadow Banking Risks and Key Vulnerabilities

Abstract

This chapter will review the risks of the shadow banking system and provide the background for understanding the different areas where the supervising authorities are planning to strengthen oversight and control.

Valerio Lemma

8. The Shadow Banking System and the Need for Supervision

Abstract

In this chapter I will move from the link between the deregulation of the banking industry and the freedom to perform market-based financing, in order to understand the need for checks and balances in the shadow banking system.

Valerio Lemma

Conclusions

Abstract

The shadow banking system seems to be the outcome of the deregulation process begun in the twentieth century. Even if the latter was aimed at reanimating the real growth of the economy and speeding up the circulation of money, the underlying idea was that a highly regulated financial market slowed down business and decreased the wellness of society.

Valerio Lemma

Backmatter

Titel: The Shadow Banking System
verfasst von: Valerio Lemma
Verlag: Palgrave Macmillan UK
Electronic ISBN: 978-1-137-49613-3
Print ISBN: 978-1-349-57812-2
DOI: https://doi.org/10.1057/9781137496133