Tracking Relevant Measures of Credit Creation in a Market-Based Financial System
Banking and Finance Review, Vol. 3, No. 2, pp. 149-157, 2011
Posted: 22 Dec 2011
Date Written: December 1, 2011
The growth of the shadow banking system has allowed credit risk to grow outside the purview of traditional bank regulation. Despite lacking relevant information and control over shadow banks, the magnitude of the recent financial crisis required the Federal Reserve to backstop their activities. Going forward, the Dodd-Frank Act offers opportunities for improved information collection and supervision of shadow banks and traditional banks. In addition to reforming and extending traditional bank regulations, relevant measures of credit creation and credit risk may be needed so that credit quantity targets can be formulated that vary with changes in economic conditions.
Keywords: Banking, Financial Intermediation, Money, Credit, Regulation
JEL Classification: G20, G21, G28
Suggested Citation: Suggested Citation