[PDF] Intermediation via Credit Chains - cpb-us-w2wpmucdncom

What is non-bank financial intermediation?

25. These financial corporations are involved in various kinds of credit intermediation that may qualify as non-bank financial intermediation. Entities within this subsector may be involved in loan provision that is dependent on short-term funding, in securitisation-based credit intermediation, and funding of financial entities.

Is inter-mediation a bank-centered system?

A new narrative has emerged, describing inter-mediation as a decentralized rather than a bank-centered system, one in which the matching of the supply of and demand for funds occurs along an extended credit intermediation chain, with specialized markets and nonbank institutions playing a part along the way.

How have banks adapted to financial intermediation?

In particular, we posit that banks have adapted through a significant transformation of their organizational structure. If financial intermediation entails increasing participation by nonbank entities, then banks can adapt by integrating those nonbank entities in the same bank holding company (BHC) structure.

Is financial intermediation happening in the Shadow?

This “bean-counting” approach is necessary to establish the extent to which financial intermediation is now occurring “in the shadow”—that is, outside the realm of banks and beyond the scrutiny of regulators.