The missing assets and the size of Shadow Banking: an update
Davide Fiaschi, Imre Kondor, Matteo Marsili, Valerio Volpati
TL;DR
This paper updates the measurement of missing assets in firm size distribution as an indicator of Shadow Banking sector size, showing a recent decrease suggesting sector deflation.
Contribution
It provides updated figures for missing assets in 2013-2015 and correlates these with Shadow Banking estimates, indicating a sector contraction.
Findings
Missing assets decreased sharply in 2015
Strong correlation between missing assets and Shadow Banking estimates in 2013-2014
Shadow Banking sector appears to be deflating in recent years
Abstract
In a recent paper, using data from Forbes Global 2000, we have observed that the upper tail of the firm size distribution (by assets) falls off much faster than a Pareto distribution. The missing mass was suggested as an indicator of the size of the Shadow Banking (SB) sector. This short note provides the latest figures of the missing assets for 2013, 2014 and 2015. In 2013 and 2014 the dynamics of the missing assets continued being strongly correlated with estimates of the size of the SB sector of the Financial Stability Board. In 2015 we find a sharp decrease in the size of missing assets, suggesting that the SB sector is deflating.
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