In the aftermath of the 2007 global financial crisis, regulators have agreed a substantial tightening of prudential regulation for banks operating in the traditional banking sector (TBS). The TBS is stringently regulated under the Basel Accords to moderate financial stability and to minimise...

This paper studies the capital regulation of banks that choose whether to become traditional, deposit taking banks or shadow banks that provide credit intermediation through securitization. If capital regulation only covers traditional banks, it will lead to the emergence of excessively risky...

In the aftermath of the 2007 global financial crisis, regulators have agreed a substantial tightening of prudential regulation for banks operating in the traditional banking sector (TBS). The TBS is stringently regulated under the Basel Accords to moderate financial stability and to minimise...

We discuss the implications of our analysis. Persistent regulatory issues continue after the 2008 crash, threaten the stability of financial flows and the world economy, and undermine our democratic societies. The global nature of these issues requires serious efforts to harmonise regulation,...

The use of contractual engineering to create channels of credit intermediation outside of the realm of banking regulation has been a recurring activity in Western financial systems over the last 50 years. After the financial crisis of 2007 and 2008, this phenomenon, at that time commonly...