money2-lectures-Lec 21--Shadow Banking, Central Banking

money2-lectures-Lec 21--Shadow Banking, Central Banking -...

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Shadow Banking, Central Banking, and the Future of Global Finance Perry Mehrling Dec 5, 2012
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What is a Bank?
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Fed as Dealer of Last Resort
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From Domestic to International LOLR
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What is shadow banking? “Money market funding of Capital market lending Global funding of local lending Market pricing , both money and capital Key role of market-making institutions
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Other definitions Received views… Gorton and Metrick (2011) “Regulating the Shadow Banking System”; Adrian and Ashcraft (Oct 2012) “Shadow Banking: A Review of the Literature”; FSB (Nov 2012) “Strengthening Oversight and Regulation of Shadow Banking” Emphasize “shadow” versus “traditional” banking Bank vs. non-bank Regulated vs. non-regulated (evasion) Direct government backstop vs. indirect (unauthorized) Versus our emphasis on banking evolution Financial globalization : dollar funding, reserve currency holding Cf. Shin (2011) “Global Banking Glut and Loan Risk Premium” Financial revolution : derivatives, risk pricing markets Imagine a world of ONLY shadow banking
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money2-lectures-Lec 21--Shadow Banking, Central Banking -...

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