Show simple item record

2016-10-26Diskussionspapier DOI: 10.18452/18416
Implications of Shadow Bank Regulation for Monetary Policy at the Zero Lower Bounds
dc.contributor.authorMazelis, Falk
dc.date.accessioned2017-09-27T12:54:24Z
dc.date.available2017-09-27T12:54:24Z
dc.date.issued2016-10-26
dc.identifier.urihttp://edoc.hu-berlin.de/18452/19093
dc.description.abstractCounter to the credit channel of monetary transmission, monetary policy tightening induces a rise in lending by two different types of non-bank financial institutions (NBFI): shadow banks and investment funds. A monetary DSGE model is able to replicate the empirical facts when augmented with interme- diaries that allow for regulatory arbitrage on the one hand, and household portfolio rebalancing on the other. Therefore NBFI reduce the effectiveness of the bank lending channel, which posits a decrease in bank lending following monetary tightening. Given the pending regulation of the fnancial system, I study how regulation of the shadow banking sector may affect the monetary transmission mechanism, especially during a zero lower bound (ZLB) episode. I find that bringing shadow banks back onto the balance sheets of commercial banks is beneficial for consumption smoothing. Alternatively, regulating them like investment funds results in a milder recession during, and a quicker escape from, the ZLB. This is because a large demand shock that moves the economy to the ZLB acts in a similar way to a monetary tightening due to the inability to lower the policy rate to the unconstrained level. Consequently, the bank lending channel becomes operational and its effectiveness can be reduced via less reliance on deposit funding.eng
dc.language.isoeng
dc.publisherHumboldt-Universität zu Berlin
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/
dc.subjectShadow Bankingeng
dc.subjectZero Lower Boundeng
dc.subjectMonetary Policyeng
dc.subjectBank Lending Channeleng
dc.subjectBayesian Methodseng
dc.subjectSearch Frictionseng
dc.subject.ddc330 Wirtschaft
dc.titleImplications of Shadow Bank Regulation for Monetary Policy at the Zero Lower Bounds
dc.typeworkingPaper
dc.identifier.urnurn:nbn:de:kobv:11-110-18452/19093-1
dc.identifier.doihttp://dx.doi.org/10.18452/18416
local.edoc.container-titleSonderforschungsbereich 649: Ökonomisches Risiko
local.edoc.pages46
local.edoc.type-nameDiskussionspapier
local.edoc.institutionWirtschaftswissenschaftliche Fakultät
local.edoc.container-typeseries
local.edoc.container-type-nameSchriftenreihe
local.edoc.container-volume2016
local.edoc.container-issue43
local.edoc.container-erstkatid2195055-6

Show simple item record