CAMBRIDGE WINTER CENTER
for Financial Institutions Policy
ILCs and Shadow Banking
Raj Date
The Cambridge Winter Center for Financial Institutions Policy is pleased to present this research note in conjunction with its ongoing research program on the structure and stability of the U.S. financial services market.
As part of its broad-based proposal to reform financial services regulation, the Administration has proposed the elimination of Industrial Loan Company (or “ILC”) charters. Opponents of the proposal have noted that ILCs have typically been marked by strong capitalization and solid credit performance, and therefore cannot fairly be linked to the excesses of the credit bubble and the ensuing financial crisis.
This note summarizes the recent evolution of ILCs, examines their empirical connection to the credit crisis, and highlights implications for policy-makers.
RESEARCH NOTE: INDUSTRIAL LOAN COMPANIES
August 10, 2009
The Administration has proposed ending the ILC loophole in the financial regulatory architecture. This Note summarizes the recent evolution of ILCs, examines the connection of ILCs to the credit crisis, and highlights implications for policy-makers.
