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Mapping the interconnectedness between EU banks and shadow banking entities

Author

Listed:
  • Abad, Jorge
  • D'Errico, Marco
  • Killeen, Neill
  • Luz, Vera
  • Peltonen, Tuomas A.
  • Portes, Richard
  • Urbano, Teresa
Abstract
This paper provides a unique snapshot of the exposures of EU banks to shadow banking entities within the global financial system. Drawing on a rich and novel dataset, the paper documents the cross-sector and cross-border linkages and considers which are the most relevant for systemic risk monitoring. From a macroprudential perspective, the identification of potential feedback and contagion channels arising from the linkages of banks and shadow banking entities is particularly challenging when shadow banking entities are domiciled in different jurisdictions. The analysis shows that many of the EU banks’ exposures are towards non-EU entities, particularly US-domiciled shadow banking entities. At the individual level, banks’ exposures are diversified although this diversification leads to high overlap across different types of shadow banking entities. JEL Classification: F65, G21, G23

Suggested Citation

  • Abad, Jorge & D'Errico, Marco & Killeen, Neill & Luz, Vera & Peltonen, Tuomas A. & Portes, Richard & Urbano, Teresa, 2017. "Mapping the interconnectedness between EU banks and shadow banking entities," ESRB Working Paper Series 40, European Systemic Risk Board.
    • Handle: RePEc:srk:srkwps:201740
    Note: 355041
    as

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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    financial stability; interconnectedness; macroprudential policy; shadow banking;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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