Rise of Shadow Banks Is Amplifying Monetary Policy, IMF Says
- Shadow banks tend to adjust balance sheets faster, IMF says
- Risk taking playing growing role in monetary policy: IMF
Shadow bankers everywhere.
Photographer: Simon Dawson/BloombergThis article is for subscribers only.
The growing role of shadow banks in the global financial system is enhancing the potency of monetary policy, according to the International Monetary Fund.
Some economists have argued that the decline in traditional bank lending has dampened the impact of changes in interest rates by central banks. But in a paper released Thursday, the IMF said the opposite is true: the transmission of monetary policy actually appears to be slightly stronger in countries with large shadow banking sectors.