Open AccessA Macroprudential Perspective on the Regulatory Boundaries of U.S. Financial Assets
Author(s) -
David M. Arseneau,
Grace Brang,
Matt Darst,
Jacob M. M. Faber,
David Rappoport,
Alexandros Vardoulakis
Publication year - 2022
Publication title -
finance and economics discussion series
Language(s) - English
Resource type - Journals
eISSN - 2767-3898
pISSN - 1936-2854
DOI - 10.17016/feds.2022.002
Subject(s) - perspective (graphical) , business , face (sociological concept) , regulatory reform , financial stability , perimeter , boundary (topology) , systemic risk , financial regulation , measure (data warehouse) , finance , economics , financial system , financial crisis , computer science , market economy , data mining , macroeconomics , mathematical analysis , social science , geometry , mathematics , artificial intelligence , sociology
This paper uses data from the Financial Accounts of the United States to map out the regulatory boundaries of assets held by U.S. financial institutions from a macroprudential perspective. We provide a quantitative measure of the regulatory perimeter—the boundary between the part of the financial sector that is subject to some form of prudential regulatory oversight and that which is not—and show how it has evolved over the past forty years. Additionally, we measure the boundaries between different regulatory agencies and financial institutions that operate within the regulatory perimeter and illustrate how these boundaries potentially become blurred in the face of regulatory overlap. Quantifying the regulatory perimeter and the boundaries for macroprudential regulators within the perimeter is informative for assessing financial stability risks over the credit cycle.