Finance de l'ombre

Our research focuses on the modeling of risks to the economy issued by residential mortgages in Europe.

In the current system of economic models, the actors all refinance themselves throughout the “classic” banking channel. And yet, since the financial crisis of 2007, we realized that the economy was divided into two different parts being closely related to each other

The Institute of International Finance (IIF) published a paper in June 2012 ("Shadow Banking": a forward looking framework for effective policy) in which it clearly identifies this parallel financial system and more specifically how it interacts with the so called classic system.

We note that there is a traditional business activity of banks, which is transparent and regulated, but on the other hand there is the Shadow Banking aspect that follows no rules and presents an attractive opportunity of an alternative financing solution for businesses. This parallel economy was estimated at not less than 67,000 billion in 2011, approximately 25% of the global financial system.

Our research has focused on the modeling of risks to the economy issued by residential mortgages in Europe. To realize this model, we started with the 'classic' macroeconomic theories and more specifically the IS / LM equation monetary equilibrium. From there, we defined and introduced the Shadow Banking at several levels: a specific interest rate, the parallel credit supply as well as the money mass added by the Shadow Banking. Our work provides a quantitative response to the work of the IIF, by modeling the entire financial system, taking into account the operations of the Shadow Banking.

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