Year of Graduation
Shadow Banking’s Influence on Financial Stability of Developed Countries (The USA and Euro Area Countries)
The world financial crisis in 2008-2009 revealed manifold drawbacks in regulatory framework of banking around the globe. The lacking regulation and insufficient supervision propelled banks and other financial institutions to increase their involvement in activities within shadow banking, notwithstanding potential threat of systemic risk for both national and global financial stability. While shadow banking is a significant source of funding for the real sector of economy, being not a subject to prudential supervision, it may pose a threat even for the real sector of economy. In this paper new supervisory systems for systemically important financial institutions in euro area under the direct responsibility of the European central bank and in the US under FRS responsibility will be observed. For the calculations statistical, financial and economic analysis techniques will be used. Preliminary results suggest that shadow banking activity impacts traditional banks, and affected banks, in their turn, may cause fragility of the whole financial system. More than that, it is even possible to assume, that shadow banking system may have immediate repercussions on the real economic sector. These findings might allow scholars in the field of global shadow banking studies to extend their understanding of all the activities under the umbrella of shadow banking and create an advanced regulatory framework for banking supervision.