Investigating the Factors Influencing Shadow Banking in EU Member States

This paper investigates the driving forces of shadow banking in 27 EU Member States, using annual data for 1999-2020. To account for heterogeneity, the panel is split into two sub-groups labeled "old" Europe and Eastern Europe. The estimations provide evidence that bank assets, insurance c...

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Bibliographic Details
Published in:Eastern European economics Vol. 62; no. 6; pp. 694 - 714
Main Authors: Petkovski, Mihail, Stojkov, Aleksandar, Kjosevski, Jordan
Format: Journal Article
Language:English
Published: Abingdon Routledge 01.11.2024
Taylor & Francis Ltd
Subjects:
Assets
Banking
Companies
Connectedness
Economic development
European cultural groups
Financial development
Financial institutions
Insurance
Interest rates
Panel data
panel data models
Shadow banking
traditional banking
Eastern Europe
Europe
ISSN:0012-8775, 1557-9298
Online Access:Get full text
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Summary:This paper investigates the driving forces of shadow banking in 27 EU Member States, using annual data for 1999-2020. To account for heterogeneity, the panel is split into two sub-groups labeled "old" Europe and Eastern Europe. The estimations provide evidence that bank assets, insurance corporation assets, interest rate spreads, and regulatory quality significantly determine shadow banking growth. Financial development also has a considerable influence. The strong link between shadow banking entities and insurance corporations highlights the need to create a framework to test the interconnectedness of financial institutions at the EU level.
Bibliography:ObjectType-Article-1
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ISSN:0012-8775
1557-9298
DOI:10.1080/00128775.2023.2215217