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Shadow banking out of the shadows: non-bank intermediation and the Italian regulatory framework

Author

Listed:
  • Carlo Gola

    (Bank of Italy)

  • Marco Burroni

    (Bank of Italy)

  • Francesco Columba

    (Bank of Italy)

  • Antonio Ilari

    (Bank of Italy)

  • Giorgio Nuzzo

    (Bank of Italy)

  • Onofrio Panzarino

    (Bank of Italy)

Abstract

Shadow banking is the creation or transfer � by banks and non-bank intermediaries � of bank-like risks outside the banking system. In Italy the shadow banking system is fully regulated, mostly following the principle of same business-same rules or �bank-equivalent regulation�. After an overview of the topic, we describe the Italian shadow banking system and the related regulatory and supervisory framework in place before the financial crisis and the subsequent enhancements. A quantitative representation of Italian shadow banking is also provided. The paper argues that through a wide and consistent regulatory perimeter, based on the principle of �bank-equivalent regulation�, it is possible to setup a well-balanced prudential framework, where both bank and non-bank regulation contribute to reducing systemic risks and regulatory arbitrage.

Suggested Citation

  • Carlo Gola & Marco Burroni & Francesco Columba & Antonio Ilari & Giorgio Nuzzo & Onofrio Panzarino, 2017. "Shadow banking out of the shadows: non-bank intermediation and the Italian regulatory framework," Questioni di Economia e Finanza (Occasional Papers) 372, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_372_17
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2017-0372/QEF_372.pdf
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    Citations

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    Cited by:

    1. Tobias Adrian & Edouard Chrétien & Michael Chui & Saskia de Vries-van Ewijk & Christoph Fricke & Daniel Fricke & Seppo Honkapohja & Jiasun Li & Victor Lyonnet & Stan Maes & Patrizio Morganti & Daniéle, 2018. "Shadow Banking: Financial Intermediation beyond Banks," SUERF Studies, SUERF - The European Money and Finance Forum, number 2018/1 edited by Esa Jokivuolle, May.
    2. Giorgio Nuzzo, 2017. "A critical review of the statistics on the size and riskiness of the securitization market: evidence from Italy and other euro-area countries," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Data needs and Statistics compilation for macroprudential analysis, volume 46, Bank for International Settlements.
    3. Francesco Zezza & Gennaro Zezza, 2020. "A Stock-Flow Consistent Quarterly Model of the Italian Economy," Economics Working Paper Archive wp_958, Levy Economics Institute.
    4. Lukasz Prorokowski, 2020. "Macroprudential due-diligence framework for shadow banking entities," Bank i Kredyt, Narodowy Bank Polski, vol. 51(6), pages 587-612.
    5. Hodula, Martin & Melecky, Ales & Machacek, Martin, 2020. "Off the radar: Factors behind the growth of shadow banking in Europe," Economic Systems, Elsevier, vol. 44(3).
    6. Gennaro Zezza & Francesco Zezza, 2019. "On the Design of Empirical Stock-Flow-Consistent Models," Economics Working Paper Archive wp_919, Levy Economics Institute.
    7. Maurizio Trapanese, 2021. "The economics of non-bank financial intermediation: why do we need to fill the regulation gap?," Questioni di Economia e Finanza (Occasional Papers) 625, Bank of Italy, Economic Research and International Relations Area.
    8. Carlo Gola & Andrea Caponera, 2019. "Policy issues on crypto-assets," LIUC Papers in Economics 2019-7, Cattaneo University (LIUC).
    9. Pietro Alessandrini & Luca Papi, 2018. "Banche locali e piccole imprese dopo la crisi tra nuove regole e innovazioni digitali," Mo.Fi.R. Working Papers 148, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    10. Salvatore Cardillo & Raffaele Gallo & Francesco Guarino, 2021. "Main challenges and prospects for the European banking sector: a critical review of the ongoing debate," Questioni di Economia e Finanza (Occasional Papers) 634, Bank of Italy, Economic Research and International Relations Area.
    11. Yulia S. Evlakhova & Nataliya A. Amosova, 2022. "Nonbank Financial Intermediation in Times of Crisis: Identifying Leadership in the G20 Countries," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 21(3), pages 426-453.

    More about this item

    Keywords

    shadow banking system; financial stability; macro-prudential regulation; non-bank financial intermediaries; market-based finance;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G00 - Financial Economics - - General - - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • 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
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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