A Macroprudential Perspective on the Regulatory Boundaries of US Financial Assets

Authors

David M. Arseneau, Board of Governors of the Federal Reserve SystemFollow
Grace Brang, Board of Governors of the Federal Reserve SystemFollow
Matt Darst, Board of Governors of the Federal Reserve SystemFollow
Jacob M. Faber, Columbia Business SchoolFollow
David E. Rappoport, Board of Governors of the Federal Reserve SystemFollow
Alexandros P. Vardoulakis, Board of Governors of the Federal Reserve SystemFollow

Document Type

Article

Abstract

This paper uses data from the Financial Accounts of the United States to map out the regulatory boundaries of assets held by US financial institutions from a macroprudential perspective. We provide a quantitative measure of the macroprudential regulatory boundary—the perimeter between the part of the financial sector that is subject to some form of macroprudential regulatory oversight and that which is not—and show how it has evolved over the past 40 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 macroprudential regulatory boundary and the boundaries for different regulators within the perimeter is informative for assessing financial stability risks over the credit cycle.

Recommended Citation

Arseneau, David M.; Brang, Grace; Darst, Matt; Faber, Jacob M.; Rappoport, David E.; and Vardoulakis, Alexandros P. (2023) "A Macroprudential Perspective on the Regulatory Boundaries of US Financial Assets," Journal of Financial Crises: Vol. 5 : Iss. 1, 1-24.
Available at: https://elischolar.library.yale.edu/journal-of-financial-crises/vol5/iss1/1