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The role of non-bank financial institutions in cross-border spillovers

Author

Listed:
  • Egemen Eren
  • Philip Wooldridge
Abstract
The growing presence of non-bank financial institutions (NBFIs) helps to develop financial markets, yet it can also impact a country’s vulnerability to cross-border spillovers. The risk of cross-border spillovers is especially acute for NBFIs’ dollar positions. Other potential sources of spillovers include currency and liquidity mismatches on NBFIs’ balance sheets, NBFIs’ use of leverage, and herding. Evidence about whether the greater involvement of NBFIs has aggravated the procyclicality and intensity of cross-border spillovers is mixed.

Suggested Citation

  • Egemen Eren & Philip Wooldridge, 2022. "The role of non-bank financial institutions in cross-border spillovers," BIS Papers, Bank for International Settlements, number 129.
    • Handle: RePEc:bis:bisbps:129
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    References listed on IDEAS

    as
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    Cited by:

    1. Fricke, Daniel & Greppmair, Stefan & Paludkiewicz, Karol, 2024. "You can’t always get what you want (where you want it): Cross-border effects of the US money market fund reform," Journal of International Economics, Elsevier, vol. 147(C).

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