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Regulation of Shadow Banks

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  • General description

    The shadow banking sector is an ill-defined financial segment that expands and contracts credit outside the regulatory perimeter. It was critical in the buildup and demise of the credit boom, and has received much regulatory attention ever since.

    Certain non-bank financial intermediaries are considered to be shadow banks for the purpose of prudential regulation. While a narrow definition would be based on the degree to which intermediaries replicate a mismatched funding and lending structure, a broader definition embraces all large intermediaries that because of their scale, role, funding or investment strategy may contribute to systemic risk.

    This advanced course focuses on financial and prudential aspects, with some attention to its legal underpinnings. It is taught by experts with significant policy experience or legal insight on this high specialized theme.

  • Topics covered

    • Financial and prudential aspects, with some attention to its legal underpinnings.
    • Shadow banking understood as a financial segment that expands and contracts credit outside the regulatory perimeter.
    • Key elements of shadow banking regulation as well as emerging issues related to their relevance for macro-prudential policy.
    • European (as well as some US) legislation on insurance companies, money mutual funds and central clearing platforms for derivatives.
    • Review of typical shadow banking funding and lending strategies such as secured credit and security lending.

  • What you will learn

    This course reviews the main elements of their regulation and some emerging issues related to their relevance for macroprudential policy.

    You will learn the implications of European (as well as some US) legislation on insurance companies, money mutual funds and central clearing platforms for derivatives, as well as for typical shadow banking funding and lending strategies such as secured credit and security lending. The latter contractual arrangement enables intermediaries to promise liquidity on demand to investors, thanks to the legal construction built on the so called safe harbor status.

  • Course modules

    For more information, download the complete course programme.

    First Day

    • Near Banking: when is an Intermediary a de Facto Bank – Enrico Perotti
    • Emerging Regulation of MMF: the US Experience – Enrico Perotti
    • The Perimeter of Banks and Near-Banks – Bart Joosen
    • Regulatory Issues on Security Lending and Secured Credit – Enrico Perotti

    Second Day

    • European Insurance Regulation – Roger Laeven
    • Systemic Risk in Insurance – Roger Laeven
    • Regulation of Common Counterparty Platforms and Derivatives – Iman van Lelyveld
    • Margining: IM, VM, Stress Testing – Iman van Lelyveld


    Total course length: between 12 and 15 hours.

    A certificate of attendance will be provided to all participants after the course.

  • Meet the instructors

    Enrico Perotti (PhD in Finance at MIT, 1990) is Professor of International Finance at the University of Amsterdam. His broad research output has appeared in the top journals in economics, finance and law. He has been a frequent guest to the IMF, Federal Reserve Board and ECB Visiting Scholar programs. Since 2009 he acted as senior advisor on banking and financial regulation to the European Commission, Federal Reserve Board, ECB, DNB and the Bank of England. He visited the Bank of England in 2011-12 as Houblon-Normal Fellow and the ECB in 2015 as Wim Duisenberg Fellow.

    Bart Joosen is Professor at VU University, Amsterdam and a private practice lawyer, working particularly for financial market clients. His main areas of expertise are in the field of financial services supervision, particularly micro-prudential supervision of banks and insurers. His most recent work is focused on the assessment of topics concerning systemic risk and systemically important institutions.

    Iman Van Levyveld is a Senior Policy Advisor with DNB’s Statistics Division and Professor of Banking and Financial Markets at the Finance Group of the Free University Amsterdam. He has chaired several international groups, most recently on liquidity stress testing. He holds a PhD from Radboud University and has published widely on, amongst other topics, interbank networks and internal capital markets. He has worked for Deutsche Bank, the Bank of England, and the International Data Hub at the Bank for International Settlements. He has visited Norges Bank and the Swedish Riksbank, and has held a position at Radboud University.

    Roger Laeven has been Full Professor (Chair of Risk and Insurance) at the Department of Quantitative Economics, University of Amsterdam, since 2011. He is also Co-Director and Co-Founder of the Amsterdam Center of Excellence in Risk and Macro Finance (ACRM), hosting the activities of the associated research focal area. In 2004, he was a visiting research fellow at the London School of Economics, Department of Statistics, and from 2007-date he is a visiting research fellow at Princeton University, Bendheim Center for Finance. From 2001-2005, he was a part-time consultant for Mercer Oliver Wyman, and from 2007-2011, he was a tenured Associate Professor at Tilburg University.

  • Prerequisites

    Degree in Social Sciences; general command of EU financial regulation.

  • Fees

    2000 € – Public Authorities (e.g. National Competent Authorities, Central Banks) and European Institutions*

    2500€ – Private Sector*

    850€ – Students (with certificate of studies)

    The course fee covers coffee and lunch breaks. Travel and hotel costs are not included.
    No group deals apply.

    Important notice

    The course will be run only if a minimum number of participants will be reached.
    Please hold back with your payment until the FBF confirms your participation in the course.


    The registration fee is non-refundable, however it will be possible to transfer registration to another person up to 20 days before the start date of the course.

    For more details, please contact fbf@eui.eu

  • Practical information


    The course will be held at the Amsterdam Business School.

    Seminar Room M3.02 (third floor)
    Plantage Muidergracht 12, Amsterdam


    Parking is available at: Artis Zoo, Plantage Kerklaan 38-40, Amsterdam.
    Please exchange your parking ticket for an exit ticket at the course.

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    For general queries: fbf@eui.eu

  • Course material

    Registered participants can download the following reading materials on this page, using the password provided by the course secretariat.


    List of readings

    Background readings for the sessions led by Enrico Perotti

    • Report to the European Commission on the perimeter of credit institutions established in the Member States. EBA Report, 27 November 2014
    • Steven L. Schwarcz, The Governance Structure of Shadow Banking: Rethinking Assumptions About Limited Liability. Notre Dame Law Review Vol. 90:1, 2014
    • Eddy Wymeersch, Shadow banking and Systemic risk. EBI Working Paper Series no. 1, 2017
    • Martin Wolf, Beware of the liquidity delusion. Financial Times, 6 October 2015
    • Marco Cipriani, Gabriele La Spada, and Philip Mulder, The Effect of the New SEC Regulation on Money Market Funds. Forthcoming, 2017.
    • J. David Cummins, Mary A. Weiss, Systemic Risk and the US Insurance Sector. The Journal of Risk and Insurance, 2014, Vol. 81, No. 3, 489–527
    • Sam Hanson, David Scharfstein, Adi Sunderam, An Evaluation of Money Market Fund Reform Proposals. Harvard University, May 2014
    • Enrico Perotti, The roots of shadow banking. VoxEU, 16 January 2014.

    Reading material for the sessions led by Iman van Lelyveld
    Full background information is available in the list downloadable from the password-protected page accessible by course participants.

    • A general introductory booklet on how Central Counterparties function, DNB (2013)
    • Abad et al., An overview of the European OTC derivatives markets ESRB Occasional Paper Series, 2016
    • Paul Glasserman and Qi Wu, Article on the prociclicality of margining, Office of Financial Research, 2017
    • Shan et al., An article on how CDSs are affecting markets, 2014. Do not read this paper in full detail; it is just illustrating one channel of connection.