Which factors drive shadow banking?
: an empirical study

  • Sophia Barbara Alhusen (Student)

Student thesis: Master's Thesis

Abstract

This thesis is an empirical analysis of the factors that drive the size of the shadow banking sector. Shadow banking, in this analysis, uses the flow of fund measure. Two-way fixed-effects panel regression for a cross section of 26 jurisdictions reveals that shadow banking in emerging and developed markets is driven by different factors. In emerging countries, the growth in shadow banking is mainly associated with increased demand of institutional investors for low risk, high yield investments. In developed countries, the size of shadow banking is related with the state of the traditional banking system. The explanatory power of these variables was much greater before the Financial Crisis of 2007/2008 than after, which could be explained by tighter regulation and related changes in the shadow banking sector.
Date of Award18 Oct 2016
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorRui André Pinto de Albuquerque (Supervisor) & Charlotte Østergaard (Co-Supervisor)

Designation

  • Mestrado em Finanças

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