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    Margaret Blair Conference Presentation

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    cwaunion
    This document discusses how financial innovation and increased leverage in shadow banking contributed to rising income inequality over time. Graphs show that from 1980 onward, the top income decile captured a growing share of total income while the finance sector grew significantly. The ratio of assets in shadow banking to traditional banking also increased substantially over this period. Charts compare leverage ratios of depository institutions and shadow banks as well as examples of high leverage levels and associated debt.

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    Margaret Blair Conference Presentation

    Uploaded by

    cwaunion
    212 views11 pages
    This document discusses how financial innovation and increased leverage in shadow banking contributed to rising income inequality over time. Graphs show that from 1980 onward, the top income decile captured a growing share of total income while the finance sector grew significantly. The ratio of assets in shadow banking to traditional banking also increased substantially over this period. Charts compare leverage ratios of depository institutions and shadow banks as well as examples of high leverage levels and associated debt.

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    This document discusses how financial innovation and increased leverage in shadow banking contributed to rising income inequality over time. Graphs show that from 1980 onward, the top income decile captured a growing share of total income while the finance sector grew significantly. The ratio of assets in shadow banking to traditional banking also increased substantially over this period. Charts compare leverage ratios of depository institutions and shadow banks as well as examples of high leverage levels and associated debt.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    212 views11 pages

    Margaret Blair Conference Presentation

    Uploaded by

    cwaunion
    This document discusses how financial innovation and increased leverage in shadow banking contributed to rising income inequality over time. Graphs show that from 1980 onward, the top income decile captured a growing share of total income while the finance sector grew significantly. The ratio of assets in shadow banking to traditional banking also increased substantially over this period. Charts compare leverage ratios of depository institutions and shadow banks as well as examples of high leverage levels and associated debt.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    of 11

    Financial Innovation, Leverage, Bubbles, and the Distribution of Income

    By Margaret M. Blair Vanderbilt University Law School

    Jobs, Inequality, and the Role of Government


    CWA, Kalmanovitz Initiative, and CEPR Conference Oct. 11, 2011 Georgetown University Law Center

    Share of Income Going to Top Decile

    Share of Employment in Finance


    Sector Employees compared to Total Number of Employees 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0

    Year Percentage in Finance, Insurance, Real Estate, Rental, and Leasing Percentage in Finance and Insurance

    Ratio of Assets in Shadow Banking to Assets in Depository Institutions


    Shadow Banking Assets Compared to Assets in Depository Institutions 1.4 1.2 1 0.8 0.6 0.4 0.2 0

    Year Ratio of Assets in Shadow Banking to Assets in Depository Institutions

    Depository Instiutions vs. Shadow Banking Institutions Leverage Ratios


    1.02 1 0.98 0.96 Liabilities to Assets 0.94 0.92 0.9 0.88 0.86 0.84 0.82 0.8 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Year Depository Institutions Leverage Ratio Shadow Banking Institutions Leverage Ratio

    90% Leverage
    $ 1 MILLION

    $ 9 MILLION DEBT

    95% Leverage
    $500,000

    $ 9.5 MILLION DEBT

    95% Leverage
    $ 1 MILLION

    $ 19 MILLION DEBT

    Click here to view more charts, including Mo

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