has written an article that describes how formerly thriving subdivisions outside of larger metropolitan areas, once known as “ boomburbs, ” are now suffering some of the highest rates of foreclosure and subsequent reo inventories. these communities are often so new that they do not have the community development infrastructure to address the impact of the large volume of reo properties. while reo properties in these relatively strong markets are more attractive to investors, the nature of these communities may change dramatically with little opportunity for local government to direct – or even prepare for – those changes. to make matters even more challenging, potential reo inventories may be larger than the current inventory numbers indicate. the brooking institution ’ s alan mallach provides us with an article that focuses on the growing number of properties that are delinquent or in the foreclosure process, but have not yet entered the market as reo. this “ shadow inventory ” threatens to continue the downward pressure on housing prices and further destabilizes communities. on a more positive note, however, mallach contends that the neighborhood impact of reo properties can be mitigated if subsequent owners have a long - term interest. he points out that the community impact of an reo property purchased by an individual homebuyer is barely noticeable. moreover, purchases by investors that plan to buy and hold the property for the long term can have positive outcomes for neighborhoods. finally, mallach asserts that local governments are not powerless to limit the destructive impact of speculative investors. rather, he argues that they can influence investor behavior through the use of regulatory tools, such as licensing and inspections, to promote stability. the challenges faced by communities with large inventories of reo and vacant property will not be resolved overnight. what began as a problem rooted in poorly underwritten loans has been exacerbated by high unemployment and slow economic growth. as delinquencies and foreclosures continue to grow, they will hinder the ability of communities to heal and ultimately to thrive. so it only makes sense that we focus our research, data analysis, outreach, and community development expertise on better understanding the market dynamics of the communities impacted by foreclosures and identify solutions to help speed their recovery. lessons learned this summit brings together people who have been on the front lines of addressing vacant and abandoned properties throughout this crisis – local government officials, community development practitioners, lenders, servicers, and researchers – to share their experiences for the

banking can also heighten procyclicality by accelerating credit supply and asset price increases during upswings and exacerbating fall in asset prices during downswings. these effects were powerfully revealed during the global financial crisis in the form of dislocation of asset - backed commercial paper ( abcp ) markets, the failure of an originate - to - distribute model employing structured investment vehicles ( sivs ) and conduits, " runs " on mmfs and a sudden reappraisal of the terms on which securities lending and repos were conducted. traditionally, regulation of banks has assumed greater importance than that of their non - banking counterparts. one reason, of course, is that protection of depositors has been traditionally an important mandate of banking supervisors. banks are at the centre of payment and settlement systems and monetary policy transmission takes place through them. banks play a critical role in credit intermediation through maturity transformation, i. e. acceptance of short term liabilities and converting them into long term assets viz. loans and advances. along with economic value, this function also creates potential liquidity risk. moreover, banks also operate on a significantly higher leverage compared to non - financial entities which could amplify their vulnerability. for all these reasons, banks are subject to a detailed and a rigorous regulatory framework. however, when non bank financial entities, which are subject to no regulation or light touch regulation, undertake bank - like functions, large risks are created which could potentially be destabilizing for the entire system. the global financial crisis demonstrated many ways in which shadow banking can have an impact on the global financial system, both directly and through its interconnectedness with the regular banking system, prompting the move to overhaul the regulation of shadow banking system. the importance and benefits of shadow banking shadows do not necessarily mean dark and sinister. in fact, shadow banking activities constitute a very useful part of the financial system. the main advantages of shadow banks lie in their ability to lower transaction costs of their operations, their quick decision - making ability, customer orientation and prompt provision of services. in india, we have always maintained that non banking finance companies ( nbfcs ), 1 a significant segment of shadow banking system, play a crucial role in broadening access to financial services, and enhancing competition and diversification of the financial sector. while nbfcs are, sometimes, seen as akin to banks in terms of the products and services offered, this comparison is strictly not accurate, as