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PRODID:-//Memento EPFL//
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SUMMARY:Banking without Deposits: Evidence from Shadow Bank Call Reports
DTSTART:20210430T150000
DTEND:20210430T163000
DTSTAMP:20260510T042402Z
UID:2b0295118f2e5430e7f5494877a8b9a50b35d359d0ab78dc3bd97cc2
CATEGORIES:Conferences - Seminars
DESCRIPTION:Gregor MATVOS\, Kellogg School of Management\nIs bank capital 
 structure designed to extract deposit subsidies? We address this question 
 by studying capital structure decisions of shadow banks: intermediaries th
 at provide banking services but are not funded by deposits. We assemble\, 
 for the first time\, call report data for shadow banks which originate one
  quarter of all US household debt. We document five facts. (1) Shadow bank
 s use twice as much equity capital as equivalent banks\, but are substanti
 ally more leveraged than non-financial firms. (2) Leverage across shadow b
 anks is substantially more dispersed than leverage across banks. (3) Like 
 banks\, shadow banks finance themselves primarily with short-term debt and
  originate long-term loans. However\, shadow bank debt is provided primari
 ly by informed and concentrated lenders. (4) Shadow bank leverage increase
 s substantially with size\, and the capitalization of the largest shadow b
 anks is similar to banks of comparable size. (5) Uninsured leverage\, defi
 ned as uninsured debt funding to assets\, increases with size and average 
 interest rates on uninsured debt decline with size for both banks and shad
 ow banks. Modern shadow bank capital structure choices resemble those of p
 re-deposit-insurance banks both in the U.S. and Germany\, suggesting that 
 the differences in capital structure with modern banks are likely due to b
 anks’ ability to access insured deposits. Our results suggest that banks
 ’ level of capitalization is pinned down by deposit subsidies and capita
 l regulation at the margin\, with small banks likely to be largest recipie
 nts of deposit subsidies. Models of financial intermediary capital structu
 re then have to simultaneously explain high (uninsured) leverage\, which i
 ncreases with the size of the intermediary\, and allow for substantial het
 erogeneity across capital structures of firms engaged in similar activitie
 s. Such models also need to explain high reliance on short-term debt of fi
 nancial intermediaries.
LOCATION:Zoom
STATUS:CONFIRMED
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