Here's a paper by Zoltan Poszar I found of interest because it puts the recent financial crisis in a new light. Specifically, it explains why institutional cash pools are not invested directly in deposits of traditional banks but in deposit alternatives. By implication, many cash pools seek to dis-intermediate themselves from the savings to investment transformation process by opting out of the banking system. The reason is to ensure principal safety beyond what the FDIC deposit guarantee covers. The paper argues that not all savings are actually looking for a real investment outlet, but are only looking for placements that could function both as source of quick liquidity and as collateral.
Of course, these pools still ended up funding some risky investments, as they ended up with the shadow banking system. The paper argues it was because there weren't enough safe government securities. Zoltan focuses on the US financial system, which by virtue of its having the global reserve currency, suffers from the Trifflin Dilemma.
Zoltan suggests issuing more government securities so that 'AAA' structured bonds securitized by shadow banks do not have to fill the deficit supply of 'safe' assets demanded by asset pools. My take on their conclusion is either the US government must borrow more, people must save less, AAA companies must issue more commercial paper.... or people have to consider the possibility of losing some principal when they save, because if none of the first 3 musts happen, shadow banks will come back to fill the void left by the market.
With the government in austerity mode, a large demographic saving up for retirement, big companies awash in cash while small businesses are losing their customers, the chances of structured products making a comeback looks high.