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Shadow Banking

2014 July 2010 Number 458
Revised February 2012

JEL classification: G20, G28, G01

Authors: Zoltan Pozsar, Tobias Adrian, Adam Ashcraft, and Hayley Boesky

The rapid growth of the market-based financial system since the mid-1980s changed the nature of financial intermediation. Within the market-based financial system, “shadow banks” have served a critical role. Shadow banks are financial intermediaries that conduct maturity, credit, and liquidity transformation without explicit access to central bank liquidity or public sector credit guarantees. Examples of shadow banks include finance companies, asset-backed commercial paper (ABCP) conduits, structured investment vehicles (SIVs), credit hedge funds, money market mutual funds, securities lenders, limited-purpose finance companies (LPFCs), and the government-sponsored enterprises (GSEs). Our paper documents the institutional features of shadow banks, discusses their economic roles, and analyzes their relation to the traditional banking system. Our description and taxonomy of shadow bank entities and shadow bank activities are accompanied by “shadow banking maps” that schematically represent the funding flows of the shadow banking system.

Available only in PDF pdf

(February 2012 version) 38 pages / 1,003 kb
Available only in PDF pdf

(July 2010 version) 81 pages / 957 kb

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