Efforts to make banks safer can effectively push risk into other sectors of finance

More restrictions imposed on banks will inevitably lead to more financial intermediation taking place outside the banking system.

It can move into money market funds, commercial credit lenders, fintech, insurance companies, trade credit, and elsewhere. 

These institutions are generally less regulated than are banks and don’t have the same kind of direct access to the Federal Reserve’s discount window.

Tyler Cowen Bloomberg 27 mars 2023

https://www.bloomberg.com/opinion/articles/2023-03-27/more-banking-regulation-won-t-prevent-more-financial-crises

 

Shadow banks controlled $225 trillion at the end of 2020, or nearly half of all global financial assets

https://englundmacro.blogspot.com/2022/11/banks-need-to-worry-about-shadow-banks.html


Kommentarer

Populära inlägg i den här bloggen

Röd Öppning - Red Opening

Niklas Ekdal, bunkergängets apologet

Swedbank: Svagare krona krävs för att nå inflationsmålet