The Central Bank of Luxembourg published Study Paper No. 203, “Disentangling the ‘shadow banking’ metaphor”, which reviews how the term “shadow banking” has been defined since the 2007 global financial crisis and argues that the lack of a shared definition has left the literature and related debate conceptually confused. Based on a review of around fifty of the most-cited publications, the paper identifies nine interpretations of “banking” and eleven of “shadow”, while noting three dominant definitions: maturity transformation without any public guarantees, maturity transformation conducted by non-bank institutions, and non-bank financial intermediation. It also finds that definitions are frequently ambiguous and sometimes inconsistent with the authors’ own stated interpretations, presenting an ongoing challenge for analysing contemporary financial systems; the central bank notes the views expressed are those of the author and not necessarily those of the Central Bank of Luxembourg or the Eurosystem.
Central Bank of Luxembourg 2026-01-27
Central Bank of Luxembourg publishes research mapping competing definitions of shadow banking
The Central Bank of Luxembourg's Study Paper No. 203 examines varied definitions of "shadow banking" since the 2007 financial crisis, identifying nine interpretations of "banking" and eleven of "shadow," with three dominant definitions. The paper highlights ambiguity and inconsistency in these definitions, complicating analysis of modern financial systems, and clarifies that the views are those of the author, not the Central Bank or the Eurosystem.