The traditional model of bank-led financial intermediation, where banks issue demandable deposits to savers and make … size. Implicit banks' costs and subsidies explain shifting bank balance sheet composition. Together, these forces explain …% to 13%. Additionally, the share of loans as a percentage of bank assets has fallen from 70% to 55%. We develop a …

In recent years, assets of non-bank financial intermediaries (NBFIs) have grown significantly relative to those of … banks. These two sectors are commonly viewed either as operating in parallel, performing different activities, or as … substitutes, performing substantially similar activities, with banks inside and NBFIs outside the perimeter of banking regulation …