Papers by Stijn Claessens
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RePEc: Research Papers in Economics, Apr 1, 2008
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Social Science Research Network, 2013
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Social Science Research Network, 2011
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BDDK bankacılık ve finansal piyasalar dergisi, Dec 1, 2008
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Social Science Research Network, 2015
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at point-of-sale: their drivers Carin van der Cruijsen and
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La financiación fintech ha crecido rápidamente en todo el mundo durante los últimos años, pero su... more La financiación fintech ha crecido rápidamente en todo el mundo durante los últimos años, pero su tamaño presenta notables variaciones entre economías. Las diferencias reflejan el desarrollo económico de un país y la estructura de sus mercados financieros: cuanto mayor es la renta de un país y menos competitivo es su sistema bancario, mayor es la actividad de financiación fintech. Los volúmenes de financiación fintech también son mayores en los países con una regulación bancaria menos estricta. Esta actividad constituye una fuente alternativa de financiación para empresas y consumidores y puede mejorar el acceso al crédito de segmentos de población subatendidos. Asimismo, puede incrementar la eficiencia de la intermediación financiera. Sin embargo, como demuestran algunos fallos operativos y problemas de conducta, la financiación fintech también plantea varias dificultades a los reguladores, muchos de los cuales concentran sus esfuerzos en garantizar la adecuada protección de consum...
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Negli ultimi anni, il credito fintech è cresciuto rapidamente in tutto il mondo ma la sua entità ... more Negli ultimi anni, il credito fintech è cresciuto rapidamente in tutto il mondo ma la sua entità varia notevolmente tra le economie. Le differenze riflettono gli sviluppi economici e la struttura dei mercati finanziari: più elevato è il reddito di un paese e meno competitivo è il suo sistema bancario, maggiore sarà l’attività di credito fintech. I volumi di credito fintech sono inoltre più cospicui nei paesi dotati di una regolamentazione bancaria meno severa. Il credito fintech offre una fonte di finanziamento alternativa alle imprese e ai consumatori, e potrebbe migliorare l’accesso al credito per i segmenti scarsamente serviti e l’efficacia dell’intermediazione finanziaria. Tuttavia, come dimostrano alcune lacune e alcuni problemi di condotta, solleva anche una serie di questioni per le autorità di vigilanza. Molte di esse riguardano la necessità di garantire una protezione adeguata a consumatori e investitori. Per la stabilità finanziaria potrebbero emergere sfide e benefici qua...
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A menudo se cree que las criptomonedas operan fuera del alcance de la regulación nacional, pero e... more A menudo se cree que las criptomonedas operan fuera del alcance de la regulación nacional, pero en realidad sus valoraciones, volúmenes de transacciones y bases de usuarios reaccionan con fuerza a las noticias sobre iniciativas de las autoridades reguladoras. La repercusión depende de la categoría regulatoria concreta a la que se refiera la noticia: las noticias sobre posibles prohibiciones generales de las criptomonedas o su sujeción a la legislación sobre valores son las que tienen un mayor efecto negativo, seguidas de las noticias sobre la lucha contra el blanqueo de capitales y la financiación del terrorismo y las relativas a restricciones de la interoperabilidad de las criptomonedas con los mercados regulados. Las noticias que apuntan al establecimiento de marcos jurídicos específicos adaptados a las criptomonedas y las ofertas iniciales de criptomonedas coinciden con fuertes avances en el mercado. De estos resultados se desprende que los mercados de criptomonedas dependen para...
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Le fonctionnement des cryptomonnaies est souvent considéré comme hors de la portée des réglementa... more Le fonctionnement des cryptomonnaies est souvent considéré comme hors de la portée des réglementations nationales. En réalité, les valorisations, volumes de transactions et bases d’utilisateurs des cryptomonnaies montrent une grande sensibilité à l’annonce de mesures réglementaires. L’impact varie selon le type de mesure annoncée : les actualités liées aux mesures d’interdiction générale frappant les cryptomonnaies, ou au traitement de celles-ci aux termes des législations sur les valeurs mobilières, produisent les effets les plus défavorables, suivies des nouvelles relatives à la lutte contre le blanchiment d’argent et le financement du terrorisme et de celles concernant la limitation de l’interopérabilité des cryptomonnaies avec les marchés réglementés. Les annonces concernant la mise en place de cadres juridiques spécifiquement conçus pour les cryptomonnaies et les émissions d’unités de cryptomonnaies (initial coin offerings, ICO) s’accompagnent en revanche de fortes hausses du m...
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IMF staff discussion note, 2012
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M F S T A F F D I S C U S S I O N N O T E, 2012
, Shadow banking is often seen as a form of regulatory arbitrage. It surely has such aspects, and... more , Shadow banking is often seen as a form of regulatory arbitrage. It surely has such aspects, and
they played a significant role in the run-up to global financial crisis. But beyond that, shadow
banking also provides important financial intermediation functions distinct from those performed
by banks and capital markets, as confirmed by its continued growth. These functions can be
economically useful, and need to be understood and properly regulated.
The traditional Financial Stability Board (FSB, 2011) definition of shadow banking (“credit
intermediation involving entities and activities outside the regular banking system”) may be too
broad for policy analysis. This paper focuses on two functions of the shadow banking system that
are most close economically to those of traditional banks: securitization and collateral
intermediation. Both assist in intermediating funds from savers to investors, and both involve risk
transformation.
After describing these two main functions, the paper reviews their economic values, highlighting
how they cater to various demands. The securitization function, operating through the prime
money funds complex, serves the needs of large institutional cash pools that seek safe, short-term
investments and—more controversially—the demand of banks for assets that can be used to
secure repo funding. And the collateral intermediation complex specializes in the efficient use of
scarce collateral.
The paper then proceeds to describe the distortions and systemic risks in shadow banking. These
include regulatory arbitrage by banks in securitization, the risks of runs on private “safe” assets,
and fragilities in collateral intermediation. In a crisis, these risks may end up being “put” to the
public safety net, as many shadow-banking-related entities—banks, dealer banks, and (under
some conditions) money market funds—benefit from implicit or explicit guarantees. These
“puts” make the system effectively subsidized, which amplifies risk-taking.
Proper understanding of the shadow banking system is essential for policy. Beyond the need to
limit shadow banking regulatory arbitrage and “puts” to the safety net, shadow banking activities
with a valid economic rationale require regulation to reduce systemic risks. Policy measures
should try to correct market failures and externalities associated with the activities of the shadow
banking system. The right policies are not all obvious yet, however, and one can only aim to
further the debate by highlighting a number of priorities for a comprehensive policy response:
Dealing with regulatory arbitrage;
Addressing systemic risks in the shadow banking system, which includes developing a
regulatory approach to dealer banks, money market funds, the tri-party repurchase
market, and dealing with innovation and complexity;
Considering demand-side pressures, including the merits of accommodating a shortage of
safe and liquid assets with publicly guaranteed short-term debt;
Better measuring and monitoring the shadow banking system; and
Studying the shadow banking system’s macroeconomic effects and implications for
monetary policy.
An appropriate set of policies may lead to a smaller shadow banking system, performing its
useful economic functions of providing safe claims and credit to borrowers in better ways.
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What is Shadow Banking?, 2015
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Alongside other non-bank financial intermediaries, open-ended funds that invest in bonds (“bond O... more Alongside other non-bank financial intermediaries, open-ended funds that invest in bonds (“bond OEFs”) have grown rapidly over the past two decades. Besides their size, their business model and role in recent events suggest that bond OEFs can amplify stress in financial markets. The March 2020 market turmoil tested the effectiveness of bond OEFs’ tools in dealing with large investor redemptions in the presence of liquidity mismatches. Their tools notwithstanding, bond OEFs had to liquidate assets on an elevated scale, thus collectively adding to bond market pressures. Without central bank interventions, broader fire sale dynamics could have been triggered. Regulation that takes a macroprudential perspective of the sector could support financial stability by ensuring that tools internalise the effect of spillovers arising from bond OEFs’ actions.
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PSN: Other International Political Economy: Investment & Finance (Topic), 2018
Fintech credit has grown rapidly around the world in recent years, but its size still varies grea... more Fintech credit has grown rapidly around the world in recent years, but its size still varies greatly across economies. Differences reflect economic development and financial market structure: the higher a country's income and the less competitive its banking system, the larger is fintech credit activity. Fintech credit volumes are also greater in countries with less stringent banking regulation. Fintech credit offers an alternative funding source for businesses and consumers, and may improve access to credit for underserved segments. It may enhance the efficiency of financial intermediation. However, as shown by some failures and conduct problems, it also gives rise to a number of challenges for regulators. Many of these are centred on ensuring adequate consumer and investor protection. For financial stability, challenges and benefits may arise if the fintech credit sector grows further, or if banks make greater use of similar technological innovations in their credit provision.
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We analyse the effectiveness of policy tools for large-scale banking distress and draw lessons fo... more We analyse the effectiveness of policy tools for large-scale banking distress and draw lessons for today. The depth of recessions following banking distress depends both on the speed with which tools were deployed and their type and on the macro-financial vulnerabilities. While, in general, swifter and broader-ranging policy actions mitigate such recessions, central banks’ asset purchases and lending are particularly effective when banks have been underperforming or when distress follows abnormally large asset price movements, such as those triggered by the Covid-19 crisis. Our analysis confirms that the recently employed policies have supported the real economy.
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Papers by Stijn Claessens
they played a significant role in the run-up to global financial crisis. But beyond that, shadow
banking also provides important financial intermediation functions distinct from those performed
by banks and capital markets, as confirmed by its continued growth. These functions can be
economically useful, and need to be understood and properly regulated.
The traditional Financial Stability Board (FSB, 2011) definition of shadow banking (“credit
intermediation involving entities and activities outside the regular banking system”) may be too
broad for policy analysis. This paper focuses on two functions of the shadow banking system that
are most close economically to those of traditional banks: securitization and collateral
intermediation. Both assist in intermediating funds from savers to investors, and both involve risk
transformation.
After describing these two main functions, the paper reviews their economic values, highlighting
how they cater to various demands. The securitization function, operating through the prime
money funds complex, serves the needs of large institutional cash pools that seek safe, short-term
investments and—more controversially—the demand of banks for assets that can be used to
secure repo funding. And the collateral intermediation complex specializes in the efficient use of
scarce collateral.
The paper then proceeds to describe the distortions and systemic risks in shadow banking. These
include regulatory arbitrage by banks in securitization, the risks of runs on private “safe” assets,
and fragilities in collateral intermediation. In a crisis, these risks may end up being “put” to the
public safety net, as many shadow-banking-related entities—banks, dealer banks, and (under
some conditions) money market funds—benefit from implicit or explicit guarantees. These
“puts” make the system effectively subsidized, which amplifies risk-taking.
Proper understanding of the shadow banking system is essential for policy. Beyond the need to
limit shadow banking regulatory arbitrage and “puts” to the safety net, shadow banking activities
with a valid economic rationale require regulation to reduce systemic risks. Policy measures
should try to correct market failures and externalities associated with the activities of the shadow
banking system. The right policies are not all obvious yet, however, and one can only aim to
further the debate by highlighting a number of priorities for a comprehensive policy response:
Dealing with regulatory arbitrage;
Addressing systemic risks in the shadow banking system, which includes developing a
regulatory approach to dealer banks, money market funds, the tri-party repurchase
market, and dealing with innovation and complexity;
Considering demand-side pressures, including the merits of accommodating a shortage of
safe and liquid assets with publicly guaranteed short-term debt;
Better measuring and monitoring the shadow banking system; and
Studying the shadow banking system’s macroeconomic effects and implications for
monetary policy.
An appropriate set of policies may lead to a smaller shadow banking system, performing its
useful economic functions of providing safe claims and credit to borrowers in better ways.
they played a significant role in the run-up to global financial crisis. But beyond that, shadow
banking also provides important financial intermediation functions distinct from those performed
by banks and capital markets, as confirmed by its continued growth. These functions can be
economically useful, and need to be understood and properly regulated.
The traditional Financial Stability Board (FSB, 2011) definition of shadow banking (“credit
intermediation involving entities and activities outside the regular banking system”) may be too
broad for policy analysis. This paper focuses on two functions of the shadow banking system that
are most close economically to those of traditional banks: securitization and collateral
intermediation. Both assist in intermediating funds from savers to investors, and both involve risk
transformation.
After describing these two main functions, the paper reviews their economic values, highlighting
how they cater to various demands. The securitization function, operating through the prime
money funds complex, serves the needs of large institutional cash pools that seek safe, short-term
investments and—more controversially—the demand of banks for assets that can be used to
secure repo funding. And the collateral intermediation complex specializes in the efficient use of
scarce collateral.
The paper then proceeds to describe the distortions and systemic risks in shadow banking. These
include regulatory arbitrage by banks in securitization, the risks of runs on private “safe” assets,
and fragilities in collateral intermediation. In a crisis, these risks may end up being “put” to the
public safety net, as many shadow-banking-related entities—banks, dealer banks, and (under
some conditions) money market funds—benefit from implicit or explicit guarantees. These
“puts” make the system effectively subsidized, which amplifies risk-taking.
Proper understanding of the shadow banking system is essential for policy. Beyond the need to
limit shadow banking regulatory arbitrage and “puts” to the safety net, shadow banking activities
with a valid economic rationale require regulation to reduce systemic risks. Policy measures
should try to correct market failures and externalities associated with the activities of the shadow
banking system. The right policies are not all obvious yet, however, and one can only aim to
further the debate by highlighting a number of priorities for a comprehensive policy response:
Dealing with regulatory arbitrage;
Addressing systemic risks in the shadow banking system, which includes developing a
regulatory approach to dealer banks, money market funds, the tri-party repurchase
market, and dealing with innovation and complexity;
Considering demand-side pressures, including the merits of accommodating a shortage of
safe and liquid assets with publicly guaranteed short-term debt;
Better measuring and monitoring the shadow banking system; and
Studying the shadow banking system’s macroeconomic effects and implications for
monetary policy.
An appropriate set of policies may lead to a smaller shadow banking system, performing its
useful economic functions of providing safe claims and credit to borrowers in better ways.