Monetary Transmission through Shadow Banks

• 成果类型: Article
• 署名作者: Xiao, Kairong
• 署名单位: Columbia University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz112
• 发表日期: 2020
• 页码: 2379
• 关键词: policy; channel; credit

摘要

I find that shadow bank money creation significantly expands during monetary-tightening cycles. This shadow banking channel offsets reductions in commercial bank deposits and dampens the impact of monetary policy. Using a structural model of bank competition, I show that the difference in depositor clienteles quantitatively explains banks' different responses to monetary policy. Facing a more yield-sensitive clientele, shadow banks are more likely to pass through rate hikes to depositors, thereby attracting more deposits when the Federal Reserve raises rates. My results suggest that monetary tightening could unintentionally increase financial fragility by driving deposits into the uninsured shadow banking sector.