Shadow Banking: what kind of Macroprudential Regulation Framework?

Shadow banking is a form of bank-like intermediation where regulatory standards are looser than for regular banks. It includes money market funds and other funds using leverage, securities and derivatives dealers, securitisations, securities financing transactions and derivatives, as well as new players like digital lenders and stablecoins. We look at theoretical contributions and empirical data and suggest possible policy options. We recommend that rules be unambiguous and apply to all institutions performing similar functions. This document was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the committee on Economic and Monetary Affairs (ECON).