What are the implications of a growing shadow banking sector?

Jun. 24, 2021

The financial ecosystem is changing rapidly and academics and market participants will need to work together to identify future risks – and prepare for the next financial crisis.

Join us online on August 23 – 25 when world-renowned academics and representatives from the financial industry will gather during the conference “Money Markets in a New Era of Central Bank Policies” to discuss the state of global money markets, and forecast what lies ahead of us.

– It can be challenging for academics to understand what is going on in the markets on a daily basis. What are the worries and constraints facing market participants? Bringing top-level academics and market participants together in this setting can create a lot of valuable insights on both ends, says Adrien d'Avernas, Assistant Professor of Finance at the Stockholm School of Economics and part of the organizing committee for the conference together with Magnus Dahlquist and Quentin Vandeweyer.

Central bank balance sheet increased more than tenfold

Since the 2008 – 2009 financial crisis, institutions outside the traditional banking sector have financed a significant portion of the economy. These institutions are usually referred to as shadow banks. This development creates difficulties for the Federal Reserve Board in its role as lender-of-last-resort and has contributed to the expansion of the set of monetary policy instruments. In the process, central bank balance sheets have increased more than tenfold at a global level. The move breaks with decades of tradition of low footprint monetary policy practices and requires academics and market participants to update their conceptual frameworks of how monetary policy affects financial markets and the economy.

– The focus of this conference is forward-looking. We want to identify future risks and understand what is going on in the markets. Speakers and panel discussants at this conference are authorities in their respective fields and a source of knowledge and insight into the topic. I very much look forward to the event, says Adrien d’Avernas.

Our keynotes and panel discussants are: Darrell Duffie, Imene Rahmouni-Rousseau, Hyun Song Shin, Monika Piazzesi, Daniela Gabor, Bill Nelson, Zoltan Pozsar, Jaana Sulin, Perry Mehrling, George Selgin.
Moderator: Izabella Kaminska