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Schnabel: The rise of non-bank finance and its implications for monetary policy transmission
The financial system plays a central role in transmitting monetary policy to the real economy.[ 1 ] Whenever a central bank adjusts its policy instruments, it relies on private financial intermediaries to translate the monetary impulse into the financing conditions for firms and households. In today’s speech, I will discuss how this process is shaped by the structure of the financial system and, specifically, by the relative importance of bank versus non-bank finance in the economy. This question is motivated by the pronounced rise in non-bank financial intermediation in the euro area, especially after the global ... (full story)