The Shadow Banking System

Losses absorbed in leveraged balance sheets are easier to manage than concentrated exporters in the banking system./nWorld trade invoiced in currencies other than the dollar./nCentral bank digital currency and FX markets moving to central bank balance sheets./nPotential shift to correspondence central banks instead of horizontal banks./nUS banks may benefit from this shift and have stronger balance sheets./nPositive outlook for the banking system in dealing with credit and wealth./nDifferent definitions of shadow banking exist, with a focus on money market funding of capital market landing./nTraditional financial market functions shifting to central bank balance sheets./nThe new frontier that will drive rates and funding markets.