SUERF — The European Money and Finance Forum and the Bank of Finland invite researchers to submit papers for the 33rd SUERF Colloquium and Bank of Finland Conference, which will take place in Helsinki, Finland on 14 – 15 September 2017, on the topic of “Shadow Banking: Financial Intermediation beyond Banks”.
Shadow banking is a broad concept. A possible definition is that is comprises non-bank institutions which do bank-like activities. Another characteristic, which the word “shadow” refers to, is that the sector is less regulated. Shadow banks can increase competition and spur innovation in the financial sector. The benefits could come in the form of i) improving efficiency and quality of financial services, and ii) offering better returns and risk diversification opportunities, especially for institutional investors and wealthy individuals. Markets may also become more liquid.
On the downside, opacity and risks may increase. The lack of regulation implies that it is difficult to monitor and prevent the build-up of leverage and concentrated risks in the shadow banking sector. Hence, the sector can be a source of systemic risks. Further, traditional banks may utilize the shadow banking sector for regulatory arbitrage.
Hence, a big question is whether regulation should be extended to the shadow banking sector, to make it come “out of the shadows”:
- Will new regulatory loopholes between banks and non-banks develop?
- Will risks simply pile up in the shadow banking sector now that banks are more heavily regulated?
- Or will market discipline suffice to do the job of regulation in this sector?
- Or is the growth of shadow banking this time more about FinTech; the provision of financial services making use of technological innovations.
- What are the fundamental problems of financial frictions they might have solved differently?
- Are new digital technologies key to finding solutions to the traditional financing frictions?
- Or are we experiencing just another boom in novel-looking financial services which ultimately share similar – or even additional — problems and risks compared to traditional banks?
We welcome papers on the above mentioned topics, and contributions on the following, non-exhaustive list:
- What are the roles in the realm of shadow banking of different types of institutions, such as insurers, pension funds, plain vanilla mutual funds, ETFs, hedge funds, and real estate funds?
- There have been recent performance problems in hedge funds, pension funds, and life insurers. What strategies for survival and adaptation do they have? Is the business model of hedge funds: sophistication, high fees, and active management still viable?
- What are the systemic risks created by the shadow banking sector? How should regulators and supervisors respond?
Special Award to Young Researchers – The Marjolin Prize
The author(s) of the paper selected by the SUERF Council of Management for having made the best contribution to the Colloquium will be awarded the Prix Marjolin (EUR 2,500). To qualify for the prize, the authors must be no older than 40 on the day the prize is awarded.