Search Results
Showing results 1 to 5 of approximately 5.
(refine search)
Report
International Banking and Nonbank Financial Intermediation: Global Liquidity, Regulation, and Implications
Global liquidity flows are largely channeled through banks and nonbank financial institutions. The common drivers of global liquidity flows include monetary policy in advanced economies and risk conditions. At the same time, the sensitivities of liquidity flows to changes in these drivers differ across institutions and have been evolving over time. Microprudential regulation of banks plays a role, influencing leverage and capitalization, changing sensitivities to shocks, and also driving risk migration from banks to nonbank financial institutions. Risk sensitivities and flightiness of global ...
Briefing
Neobanks: Banks by Any Other Name?
Neobanks, or digital banks, are bank-like providers of financial services that operate through apps and aim to appeal to different consumer groups through innovative features and design. Whether or not neobanks evolve into full banks, they have the potential to affect the traditional banking model.
Report
Money Market Fund Vulnerabilities: A Global Perspective
Money market funds (MMFs) are popular around the world, with over $9 trillion in assets under management globally. From their origins in the 1970s, MMFs have operated in a niche between the capital markets and the banking system, as investment funds that offer private money-like assets with features similar to those of bank deposits. Hence, they are vulnerable to runs that arise from liquidity transformation and from sudden changes in investor perceptions of the funds’ ability to serve as money-like assets. Since 2000, MMF runs have occurred in many countries and under many regulatory ...
Discussion Paper
Financial Fragility without Banks
Proponents of narrow banking have argued that lender of last resort policies by central banks, along with deposit insurance and other government interventions in the money markets, are the primary causes of financial instability. However, as we show in this post, non-bank financial institutions (NBFIs) triggered a financial crisis in 1772 even though the financial system at that time had few banks and deposits were not insured. NBFIs profited from funding risky, longer-dated assets using cheap short-term wholesale funding and, when they eventually failed, authorities felt compelled to rescue ...
Discussion Paper
Evidence from the Bond Market on Banks’ “Too-Big-to-Fail” Subsidy
Yesterday’s post presented evidence on a possible upside of very large banks, namely, lower costs. In today’s post, we focus on a possible downside, that is, whether investors in the primary bond market “discount” risk when they invest in bonds of the too-big-to-fail banks.