Publication detail

The Activity of the Banking and Shadow Banking Sector vs. Lending Standards in Selected Euro Area Countries: A Wavelet Approach

KUČEROVÁ, Z. POMĚNKOVÁ, J.

Original Title

The Activity of the Banking and Shadow Banking Sector vs. Lending Standards in Selected Euro Area Countries: A Wavelet Approach

Type

conference paper

Language

English

Original Abstract

Shadow banking activities can be associated with the potential financial instability because these activities are realised outside the regulated banking sector. The aim of the paper is to assess the relationship between the banking and shadow banking activities and lending standards imposed by banking institutions in nine Euro Area countries using a method of regression and correlation analysis and a wavelet approach. We use quarterly data over the period 2003-2013. When measuring the shadow banking activity at national level, the shadow banking activities are most extensive in Austria, Belgium, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. We conclude that banking institutions originated fewer loans in reaction to tighter lending standards (imposed by these banking insti-tutions on their loans). However, the expected positive impact of tighter lending standards on loans provided by shadow banking institutions is not confirmed. We can also admit flexible reactions of OFIs to a current economic situation during the analyses period while the behaviour of MFIs followed a long-term strategy, i.e. banks did not react to short-term objectives as frequently as non-banks. In this con-text, we can conclude that banks meet their stabilising role in the economy while non-banks try to fill up gaps in the financial markets.

Keywords

wavelet co-spectrum, comovement, shadow banking sector, banking sector, market-based system, bank-based system

Authors

KUČEROVÁ, Z.; POMĚNKOVÁ, J.

RIV year

2015

Released

9. 9. 2015

Publisher

University of West Bohemia, Plzeň

Location

Plzeň

ISBN

978-80-261-0539-8

Book

33rd International Conference Mathematical Methods in Economics MME 2015 - Conference Proceedings

Pages from

425

Pages to

430

Pages count

6

BibTex

@inproceedings{BUT115998,
  author="Zuzana {Kučerová} and Jitka {Poměnková}",
  title="The Activity of the Banking and Shadow Banking Sector vs. Lending Standards in Selected Euro Area Countries: A Wavelet Approach",
  booktitle="33rd International Conference Mathematical Methods in Economics MME 2015 - Conference Proceedings",
  year="2015",
  pages="425--430",
  publisher="University of West Bohemia, Plzeň",
  address="Plzeň",
  isbn="978-80-261-0539-8"
}