The study takes on-balancesheet assets as a proxy for company size and fits a model to it that largely works. Fine so far. But the implication that this works

The study takes on-balancesheet assets as a proxy for company size and fits a model to it that largely works. Fine so far. But the implication that this works at the top end is either that the companies are hugely mis-stating their on-balancesheet assets or that there are other companies, much bigger than FNMA, that have balancesheets with multiples of the GDP of the States. Neither of these explanations are plausible even if you believe that they're all lying, thieving scumbags. The numbers are just too big. However, there is another explanation. That on-balancesheet assets isn't a good proxy for size for big financial institutions. And all of a sudden the problem is solved because on-balancesheet assets isn't a good proxy for size for big financial institutions. Apart from anything else many of them run huge assets and liabilities off-balancesheet. BTW that doesn't make them secret, they hit the accounts just the same, it just means that the proxy in the study won't work. And for what it's worth, this is wholly orthogonal to the size of Shadow Banking, how much stuff is hidden in the Caymans etc etc. Fascinating and worrying subjects in themselves.