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Contribution Details

Type Book Chapter
Scope Discipline-based scholarship
Title Shadow banking and competition: Decomposing market power by activity
Organization Unit
  • Steven Ongena
  • Daniele Titotto
  • Jaap Bikker
  • Laura Spierdijk
Item Subtype Original Work
Refereed Yes
Status Published in final form
  • English
Booktitle Research Handbook on Competition in Banking and Finance
ISBN 9781785363290
Place of Publication Cheltenham UK
Publisher Edward Elgar Publishing
Page Range 264 - 304
Date 2017-09-29
Abstract Text The term “shadow banking” refers to credit intermediation performed outside the regulated perimeter of traditional lenders. Banks, however, do play a significant role in it. The authors review the origins and characteristics of the shadow banking system, investigate how banks control various steps of the securitization process, and analyze the nexus with competition. They use a double-output formulation of the Lerner index to disentangle the market power of lending and non-traditional activities. They find important differences in the two indicators, consistently with the common narrative. The market power related to non-traditional activities is both larger in magnitude and more pro-cyclical than that estimated for traditional lending. The authors’ findings suggest that banks might engage in less traditional business lines to alleviate the competitive pressure borne on core activities.
Related URLs
Digital Object Identifier 10.4337/9781785363306.00021
Other Identification Number merlin-id:13999
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