Chasing the Shadows (Ghosh et al.)

Chasing the shadows: How significant is shadow banking in emerging markets? by Swati Ghosh, Ines G. Mazo and Inci Ötker-Robe, published by World Bank. “Shadow banking in EMDEs generally does not involve long, complex, opaque chains of intermediation, as is often the case in advanced economies. Nonetheless, it can pose systemic risks, both directly, as its importance in the total financial system grows (with the concomitant credit, market, and liquidity risks that its participants undertake), and indirectly through its interconnectedness with the regulated banking system. At the same time, shadow banks also play an important role in channeling alternative funding sources to EMDEs, especially as deleveraging pressures from European banks continue.”