Traditional banks and shadow banks are interconnected not only via direct exposures but also via exposures to common markets. Channels of propagation of possible shocks in the shadow banking sector to traditional banks is another analytical avenue worthwhile exploring. Research in this respect is on-going at the ECB.
It is the crisis period that shows best that bankcentric systems – elsewhere and in Europe, but more poignantly in Serbia where banks account for over 90% of the financial sector – face significant challenges, such as: a) how to refinance loans due for repayment, b) how to obtain fresh capital in the market, and c) how to preserve public trust in the banking system.