Chasing the Shadows : How Significant is Shadow Banking in Emerging Markets?

Broadly defined as credit intermediation involving entities and activities outside the regular banking system, shadow banking raises important policy concerns. Given significant challenges with data availability, the size, nature and significance of shadow banking in emerging market and developing economies (EMDEs) are even less discussed and understood. Shadow banking in EMDEs generally does not involve long, complex, opaque chains of intermediation, as is often the case in advanced economies. Nonetheless, it can pose systemic risks, both directly, as its importance in the total financial system grows (with the concomitant credit, market, and liquidity risks that its participants undertake), and indirectly through its interconnectedness with the regulated banking system. At the same time, shadow banks also play an important role in channeling alternative funding sources to EMDEs, especially as deleveraging pressures from European banks continue. This suggests that policy makers need to manage trade-offs carefully to ensure that shadow banks provide alternative but safe sources of funding to the private sector without generating additional systemic risks. Based on a snapshot of selected EMDEs in East Asia and in Central and Eastern Europe, and subject to caveats dictated by limited data availability, the shadow banking system is relatively small in most EMDEs, but has grown markedly in recent years, reaching a not insignificant share of the financial system in some countries, while remaining largely unregulated.

Bibliographic Details

Main Authors:	Ghosh, Swati, Gonzalez del Mazo, Ines, Ötker-Robe, İnci
Format:	Brief biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2012-09
Subjects:	ACCESS TO CREDIT, ACCOUNTING, ADVANCED COUNTRIES, ADVANCED ECONOMIES, ALTERNATIVE FUNDING, ALTERNATIVE SOURCES OF FINANCING, ARBITRAGE, ASSET BACKED SECURITIES, ASSET MANAGERS, ASSET PRICES, ASSET VALUES, BALANCE SHEET, BALANCE SHEETS, BANK ACTIVITIES, BANK BALANCE SHEETS, BANK CREDIT, BANK DEPOSITS, BANK INTERMEDIATION, BANK LENDING, BANK LOANS, BANK POLICY, BANK RUN, BANKING INSTITUTIONS, BANKING SECTOR, BANKING SERVICES, BANKING SYSTEM, BANKS, BONDS, BORROWER, BORROWING, BROKER, BROKERAGE, BROKERAGE FIRMS, BROKERS, BUSINESS CYCLE, CAPITAL MARKETS, CENTRAL BANK, CENTRAL BANKS, COLLATERAL, COMMERCIAL BANK, COMMERCIAL BANK DEPOSITS, COMMERCIAL BANKING, COMMERCIAL BANKS, COMMERCIAL LENDERS, COMMERCIAL PAPERS, CONTAGION, CONVERTIBLE DEBT, COOPERATIVE BANKS, CREDIT AVAILABILITY, CREDIT EXTENSION, CREDIT INTERMEDIATION, CREDIT MARKETS, CREDIT NEEDS, CREDIT PRODUCTS, CREDIT RISK, CREDIT RISK MANAGEMENT, CREDIT RISKS, CREDIT SPREADS, CREDIT UNIONS, CUSTODIAN BANKS, DATA AVAILABILITY, DEBT, DEBT OBLIGATIONS, DEFAULTS, DEPOSIT, DEPOSIT INSURANCE, DEPOSITS, DERIVATIVE, DEVELOPING COUNTRIES, DEVELOPING ECONOMIES, DIVIDENDS, ECONOMIC POLICY, EMERGING MARKET, EMERGING MARKETS, END-BORROWERS, EQUITY FUNDS, EQUITY TRADING, EXPOSURE, EXPOSURES, FACTORING, FEDERAL RESERVE, FEDERAL RESERVE BANK, FEDERAL RESERVE BANK OF NEW YORK, FINANCE COMPANIES, FINANCIAL CRISIS, FINANCIAL INSTABILITY, FINANCIAL INSTRUMENTS, FINANCIAL INTERMEDIARIES, FINANCIAL INTERMEDIATION, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL PRODUCTS, FINANCIAL REFORM, FINANCIAL RISKS, FINANCIAL SECTOR ASSESSMENT, FINANCIAL SECTOR STABILITY, FINANCIAL STABILITY, FINANCIAL SYSTEM, FINANCIAL SYSTEM STABILITY, FINANCIAL SYSTEMS, FOREIGN CURRENCY, FORMAL BANKS, FORMAL FINANCIAL SECTOR, FUND INVESTMENTS, FUND MANAGEMENT, FUNDING SOURCES, FUTURES, GLOBAL ECONOMY, GOVERNMENT BONDS, HEDGE FUND, HIDDEN RISKS, HIGH INTEREST RATES, HOLDINGS, HOUSEHOLDS, IMPLICIT SUPPORT, INFRASTRUCTURE PROJECTS, INSTITUTIONAL INVESTORS, INSURANCE, INSURANCE COMPANIES, INSURED DEPOSITS, INTEREST RATE, INTEREST RATE CEILINGS, INTEREST RATES, INTERNATIONAL FINANCE, ISSUANCE, LAWS, LENDER, LENDERS, LENDERS OF LAST RESORT, LETTERS OF CREDIT, LIQUIDITY, LIQUIDITY RISKS, LOAN ORIGINATION, LOCAL BANKS, MACROECONOMIC MANAGEMENT, MARKET CONFIDENCE, MARKET VALUE, MATURITY, MATURITY TRANSFORMATION, MICROFINANCE, MONETARY FUND, MONETARY POLICY, MONEY LENDERS, MONEY MARKET, MUTUAL FUNDS, NEW PRODUCTS, NONBANK FINANCIAL INSTITUTIONS, NONBANKS, NONPERFORMING LOANS, OUTSTANDING LOANS, PAWN, PAWN SHOPS, PENSION, PENSION FUNDS, PENSIONS, PRIVATE LENDERS, PRIVATE LENDING, PRIVATE PENSION, PRIVATE SECTOR DEVELOPMENT, PRUDENTIAL REGULATIONS, PUBLIC PENSION, RAPID GROWTH, REAL ESTATE, REGULATORY AGENCIES, REGULATORY AGENCY, REGULATORY GAPS, REGULATORY REQUIREMENTS, REGULATORY SYSTEM, REPO, REPO MARKETS, REPOS, RESERVE, RESERVE REQUIREMENT, RETURNS, RISK DIVERSIFICATION, SAFETY NET, SAVINGS, SECURITIES, SECURITIZATION, SHORT-TERM REPOS, SMALL BANKS, SMALL LOAN, SUPERVISORY AGENCIES, SYSTEMIC RISK, SYSTEMIC RISKS, THIRD WORLD, TRADE FINANCING, TRADES, TRADING, TRADITIONAL BANKING, TRANSFER OF SECURITIES, UNDERLYING ASSET, VALUATION, VALUATION CHANGES, VALUE OF COLLATERAL, WHOLESALE FINANCIAL MARKET, WHOLESALE FUNDING, WHOLESALE MARKET,
Online Access:	http://documents.worldbank.org/curated/en/2012/09/16728825/chasing-shadows-significant-shadow-banking-emerging-markets http://hdl.handle.net/10986/17088
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