Shadow Banking on the Ides of March

William Shakespeare’s The Tragedy of Julius Caesar forever linked the date March 15th to the assassination of Julius Caesar in 44 B.C. However, before the Roman Senate conspiracy, the Ides of March served as Rome’s deadline for settling debts. In March of 2020, systemic threatening debts came due in the shadow banking sector of the global financial system. 

The shadow banking system is composed of financial intermediaries that fall outside the purview of conventional regulated banking. Non-bank financial assets have risen dramatically since the Global Financial Crisis, making up $184 trillion of the $379 trillion in total financial assets outstanding at the end of 2018. Given their magnitude and reach, it’s no wonder that shadow banks were at the center of March’s market mayhem.