{
  "title": "The Nonbank-Bank Nexus and the Shadow Banking System",
  "publication": "IMF Working Papers, December 1, 2011",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/the-nonbank-bank-nexus-and-the-shadow-banking-system-25421",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/the-nonbank-bank-nexus-and-the-shadow-banking-system-25421",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/the-nonbank-bank-nexus-and-the-shadow-banking-system-25421/index.md",
  "summary": "The present way of thinking about financial intermediation does not fully incorporate the rise of asset managers as a major source of funding for banks through the shadow banking system. Asset managers are dominant sources of demand for non-M2 types of money and serve as source collateral ?",
  "sections": [
    {
      "heading": "Summary and central thesis",
      "content": "- The present way of thinking about financial intermediation does not fully incorporate the rise of asset managers as a major source of funding for banks through the shadow banking system.\n- Asset managers are dominant sources of demand for non-M2 types of money and serve as source collateral \"mines\" for the shadow banking system.\n- Banks receive funding through the re-use of pledged collateral \"mined\" from asset managers."
    },
    {
      "heading": "Key quantitative estimates",
      "content": "- Size of the shadow banking system in the U.S. may be up to $25 trillion at year-end 2007.\n- Size of the shadow banking system in the U.S. may be up to $18 trillion at year-end 2010.\n- Pages: 19\n- Volume: 2011\n- Issue: 289\n- Series: Working Paper No. 2011/289\n- DOI: https://doi.org/10.5089/9781463927233.001\n- Stock No: WPIEA2011289\n- ISBN: 9781463927233\n- ISSN: 1018-5941"
    },
    {
      "heading": "Findings and implications for monitoring",
      "content": "- Asset managers’ demand for non-M2 types of money implies monitoring the shadow banking system will warrant closer attention well beyond the regulatory perimeter.\n- Re-use (rehypothecation) of pledged collateral is a central mechanism through which the shadow banking system funds banks."
    },
    {
      "heading": "Policy recommendations and regulatory considerations",
      "content": "- Regulators will need to consider the re-use of pledged collateral when defining bank leverage ratios.\n- Monitoring frameworks should explicitly account for asset managers as dominant sources of demand for non-M2 types of money and as sources of pledged collateral to the shadow banking system."
    },
    {
      "heading": "Subject coverage and keywords",
      "content": "- Subjects: Asset and liability management; Asset management; Banking; Collateral; Commercial banks; Financial institutions; Financial services; Securities; Shadow banking\n- Keywords: asset; Asset management; asset manager; asset manger; assets of the bank; bank; bank X; collateral; Commercial banks; commercial paper; Global; holding company; maturity transformation; off-balance sheet leverage; rehypothecation; securities; securities borrower; securities lender; Shadow banking; shadow banking system; source collateral; WP; Y. Thus FoF\n\nManmohan Singh, and Zoltan Pozsar. \"The Nonbank-Bank Nexus and the Shadow Banking System\", IMF Working Papers 2011, 289 (2011), accessed 9/16/2026, https://doi.org/10.5089/9781463927233.001\n\n---\n\n Content in this bundle\n\n- 1. A Simple Financial Intermediation Framework\n  - 1. A Simple Financial Intermediation Framework (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1. A Simple Financial Intermediation Framework (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-nonbank-bank-nexus-and-the-shadow-banking-system-25421"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/the-nonbank-bank-nexus-and-the-shadow-banking-system-25421/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/the-nonbank-bank-nexus-and-the-shadow-banking-system-25421/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/the-nonbank-bank-nexus-and-the-shadow-banking-system-25421/bundle-manifest.json)",
    "Authors: Manmohan Singh, Zoltan Pozsar",
    "Published: December 1, 2011",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781463927233.001",
    "The present way of thinking about financial intermediation does not fully incorporate the rise of asset managers as a major source of funding for banks through the shadow banking system.",
    "Asset managers are dominant sources of demand for non-M2 types of money and serve as source collateral \"mines\" for the shadow banking system.",
    "Banks receive funding through the re-use of pledged collateral \"mined\" from asset managers.",
    "Size of the shadow banking system in the U.S. may be up to $25 trillion at year-end 2007.",
    "Size of the shadow banking system in the U.S. may be up to $18 trillion at year-end 2010.",
    "Pages: 19",
    "Volume: 2011",
    "Issue: 289",
    "Series: Working Paper No. 2011/289",
    "DOI: https://doi.org/10.5089/9781463927233.001",
    "Stock No: WPIEA2011289",
    "ISBN: 9781463927233",
    "ISSN: 1018-5941",
    "Asset managers’ demand for non-M2 types of money implies monitoring the shadow banking system will warrant closer attention well beyond the regulatory perimeter.",
    "Re-use (rehypothecation) of pledged collateral is a central mechanism through which the shadow banking system funds banks.",
    "Regulators will need to consider the re-use of pledged collateral when defining bank leverage ratios.",
    "Monitoring frameworks should explicitly account for asset managers as dominant sources of demand for non-M2 types of money and as sources of pledged collateral to the shadow banking system.",
    "Subjects: Asset and liability management; Asset management; Banking; Collateral; Commercial banks; Financial institutions; Financial services; Securities; Shadow banking",
    "Keywords: asset; Asset management; asset manager; asset manger; assets of the bank; bank; bank X; collateral; Commercial banks; commercial paper; Global; holding company; maturity transformation; off-balance sheet leverage; rehypothecation; securities; securities borrower; securities lender; Shadow banking; shadow banking system; source collateral; WP; Y. Thus FoF",
    "**1. A Simple Financial Intermediation Framework**"
  ],
  "related": [
    {
      "title": "1. A Simple Financial Intermediation Framework",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp11289.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp11289.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp11289.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/the-nonbank-bank-nexus-and-the-shadow-banking-system-25421/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/the-nonbank-bank-nexus-and-the-shadow-banking-system-25421/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/the-nonbank-bank-nexus-and-the-shadow-banking-system-25421/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-18T08:23:27.827Z"
}