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472 - Non-bank financial institutions: assessment of their impact on the stability of the financial system

Patrice Muller, Graham Bishop, Shaan Devnani, Mark Lewis and Rohit Ladher (London Economics)

Non-bank financial institutions: assessment of their impact on the stability of the financial systempdf(3 MB) Choose translations of the previous link 

Summary for non-specialistspdf(49 kB) Choose translations of the previous link 


The study paper examines how non-bank financial institutions (in particular money market funds, private equity firms, hedge funds, pension funds and insurance undertakings, central counterparties, and UCITS and ETFs) have performed over the last decade and during the financial crisis. The report addresses the risks run by each of this type of institutions (credit, counterparty, liquidity, redemption, and fire sales risk), and highlights also the risks arising from a number of activities frequently undertaken by these institutions, in particular securitisation (a.o. agency risk), securities lending (a.o. counterparty risk) and repos (a.o. liquidity risk).

The report finally provides a selected overview of approaches for the measurement of financial instability and financial distress.

(European Economy. Economic Papers. 472. November 2012. Brussels. PDF. 261pp. Tab. Graph. Ann. Free.)

KC-AI-12-472-EN-N (online)
ISBN 978-92-79-22993-0 (online)
doi:10.2765/27776 (online)

JEL classification: G23

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