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This global handbook provides an up-to-date and comprehensive overview of shadow banking, or market-based finance as it has been recently coined. Engaging in financial intermediary services outside of normal regulatory parameters, the shadow banking sector was arguably a critical factor in causing the 2007-2009 financial crisis. This volume focuses specifically on shadow banking activities, risk, policy and regulatory issues. It evaluates the nexus between policy design and regulatory output around the world, paying attention to the concept of risk in all its dimensions—the legal, financial, market, economic and monetary perspectives. Particular attention is given to spillover risk, contagion risk and systemic risk and their positioning and relevance in shadow banking activities. Newly introduced and incoming policies are evaluated in detail, as well as how risk is managed, observed and assessed, and how new regulation can potentially create new sources of risk. Volume I concludes with analysis of what will and still needs to happen in the event of another crisis. Proposing innovative suggestions for improvement, including a novel Pigovian tax to tame financial and systemic risks, this handbook is a must-read for professionals and policy-makers within the banking sector, as well as those researching economics and finance.

Nonbank financial institutions. --- Limited service banks --- Nonbank banks --- Nonbanks --- Shadow banking --- Shadow banks --- Banks and banking --- Banks and banking. --- Risk management. --- Financial crises. --- Banking. --- Risk Management. --- Financial Crises. --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Crises --- Insurance --- Management --- Agricultural banks --- Banking --- Banking industry --- Commercial banks --- Depository institutions --- Finance --- Financial institutions --- Money

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This paper studies the US housing market using a proprietary and comprehensive dataset covering nearly 90 million residential transactions over 1998–2018. First, we document the evolution of different types of investment purchases such as those conducted by short-term buyers, out-of-state buyers, and corporate cash investors. Second, we quantify the contributions of non-primary home buyers to the housing cycle. Our findings suggest that the share of short-term investors grew substantially in the run-up to the global financial crisis (GFC), which amplified the boom-bust cycle, while out-of-state buyers propped up prices in some areas during the recession. An instrumental variable approach is employed to establish a causal relationship between housing investors and prices. Finally, we show that the recent rise of shadow bank lending in the residential market is associated with riskier mortgages, and explore its implications for non-primary home buyers and its effects on house prices and rents.

Banks and Banking --- Infrastructure --- Money and Monetary Policy --- Real Estate --- Industries: Financial Services --- Personal Finance --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Housing Supply and Markets --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Housing --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Property & real estate --- Finance --- Macroeconomics --- Monetary economics --- Banking --- Housing prices --- Currencies --- Shadow banking --- Prices --- Saving and investment --- Money --- Nonbank financial institutions --- Law and legislation --- United States

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This paper studies the US housing market using a proprietary and comprehensive dataset covering nearly 90 million residential transactions over 1998–2018. First, we document the evolution of different types of investment purchases such as those conducted by short-term buyers, out-of-state buyers, and corporate cash investors. Second, we quantify the contributions of non-primary home buyers to the housing cycle. Our findings suggest that the share of short-term investors grew substantially in the run-up to the global financial crisis (GFC), which amplified the boom-bust cycle, while out-of-state buyers propped up prices in some areas during the recession. An instrumental variable approach is employed to establish a causal relationship between housing investors and prices. Finally, we show that the recent rise of shadow bank lending in the residential market is associated with riskier mortgages, and explore its implications for non-primary home buyers and its effects on house prices and rents.

United States --- Banks and Banking --- Infrastructure --- Money and Monetary Policy --- Real Estate --- Industries: Financial Services --- Personal Finance --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Housing Supply and Markets --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Housing --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Property & real estate --- Finance --- Macroeconomics --- Monetary economics --- Banking --- Housing prices --- Currencies --- Shadow banking --- Prices --- Saving and investment --- Money --- Nonbank financial institutions --- Law and legislation

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Motivated by the increasing interest in analyzing the links between the financial sector and the real economy, we develop a macro-financial structural model with two novel features. First, we include idiosyncratic and aggregate risk in a tractable general equilibrium model. This allows us to capture sectoral dynamics and the probabilities of default of both firms and financial intermediaries, and the feedback between them. Second, we introduce the concept of sticky (observed) versus flexible (agents’ target) capital. The identified differences between realized and optimal values — the capital gaps of firms and banks — lead financial and business cycles, and cause gaps in credit spreads and asset prices. The model can be used as a signaling device for macroprudential intervention, and to gauge whether macroprudential action was successful ex-post (e.g., whether gaps were closed). For illustration, we show how the analysis of gaps can be applied to the U.S. economy using Bayesian estimation techniques.

Accounting --- Financial Risk Management --- Money and Monetary Policy --- Industries: Financial Services --- Criteria for Decision-Making under Risk and Uncertainty --- Business Fluctuations --- Cycles --- Financial Markets and the Macroeconomy --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Public Administration --- Public Sector Accounting and Audits --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financial Crises --- Finance --- Financial reporting, financial statements --- Monetary economics --- Economic & financial crises & disasters --- Nonbank financial institutions --- Mutual funds --- Financial statements --- Credit --- Financial crises --- Financial services industry --- Finance, Public