FSB releases report on shadow banking — refining metrics and lower risk numbers

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On October 30th the FSB released “Global Shadow Banking Monitoring Report 2014”, their annual examination of the world of shadow banking. Shadow banking is described as “non-bank credit intermediate with bank-like systemic risks…includ[ing] maturity transformation, liquidity transformation, imperfect risk transfer, and leverage…” We take a look at the report.

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IMF Shadow Banking report promotes regulation to balance risk and economic growth

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In October 2014, the International Monetary Fund (IMF) published its Global Financial Stability Report (“the Report”) entitled “Risk Taking, Liquidity, and Shadow Banking: Curbing Excess while Promoting Growth”. The report asserts that global economic recovery is dependent upon “accommodative” monetary policy in advanced economies by way of shadow banking. At the same time, the Report cautions that prolonged accommodation may also encourage excessive financial risk.

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IMF: Risk Taking, Liquidity, and Shadow Banking

The October 2014 Global Financial Stability Report (GFSR) finds that six years after the start of the crisis, the global economic recovery continues to rely heavily on accommodative monetary policies in advanced economies. Monetary accommodation remains critical in supporting the economy by encouraging economic risk taking in the form of increased real spending by households and greater willingness to invest and hire by businesses. However, prolonged monetary ease may also encourage excessive financial risk taking.

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“Financial Stability Monitoring” by the Fed keeps looking for that line between the gold standard of risk management and the desire to let the economy grow

A recently revised staff research report from the Federal Reserve, “Financial Stability Monitoring,” by Tobias Adrian, Daniel Covitz, and Nellie Liang, looks at how risk should be tracked across financial markets. We review both the revised report and a new blog article by the authors.

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Shadow Banking: recent articles and speeches

We’ve seen several recent news articles and commentary on Shadow Banking, from The Economist’s special report to news on China’s CITIC. Below are the most interesting articles we’ve seen lately.

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