Shadow Banking in China
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Shadow banking system
From Wikipedia, the free encyclopedia Financial market participants | | * Collective investment schemes * Credit unions * Insurance companies * Investment banks * Pension funds * Prime brokers * Trusts | Finance series | * Financial market * Participants * Corporate finance * Personal finance * Public finance * Banks and banking * Financial regulation | * v * t * e |
The shadow banking system is the collection of non-bank financial intermediaries that provide services similar to traditional commercial banks. It is sometimes said to include entities such as hedge funds, money market funds and structured investment vehicles (SIV), but the meaning and scope of shadow banking is disputed in the academic literature. Investment banks as well as commercial banks may conduct much of their business in the shadow banking system (SBS), but most are not generally classed as SBS institutions themselves.[1][2] At least one financial regulatory expert has said that regulated banking organizations are the largest shadow banks.[3]
The core activities of investment banks are subject to regulation and monitoring by central banks and other government institutions - but it has been common practice for investment banks to conduct many of their transactions in ways that don't show up on their conventional balance sheet accounting and so are not visible to regulators or unsophisticated investors.[4] For example, prior to the financial crisis, investment banks financed mortgages through off-balance sheet securitizations (e.g. asset-backed commercial paper programs) and hedged risk through off-balance sheet credit default swaps.[4] Some experts have said that regulated banking organizations are the largest shadow banks. No major investment banks exist in the United States other than those that are part of the regulated banking system. (In 2008, Morgan
Shadow banking system
From Wikipedia, the free encyclopedia Financial market participants | | * Collective investment schemes * Credit unions * Insurance companies * Investment banks * Pension funds * Prime brokers * Trusts | Finance series | * Financial market * Participants * Corporate finance * Personal finance * Public finance * Banks and banking * Financial regulation | * v * t * e |
The shadow banking system is the collection of non-bank financial intermediaries that provide services similar to traditional commercial banks. It is sometimes said to include entities such as hedge funds, money market funds and structured investment vehicles (SIV), but the meaning and scope of shadow banking is disputed in the academic literature. Investment banks as well as commercial banks may conduct much of their business in the shadow banking system (SBS), but most are not generally classed as SBS institutions themselves.[1][2] At least one financial regulatory expert has said that regulated banking organizations are the largest shadow banks.[3]
The core activities of investment banks are subject to regulation and monitoring by central banks and other government institutions - but it has been common practice for investment banks to conduct many of their transactions in ways that don't show up on their conventional balance sheet accounting and so are not visible to regulators or unsophisticated investors.[4] For example, prior to the financial crisis, investment banks financed mortgages through off-balance sheet securitizations (e.g. asset-backed commercial paper programs) and hedged risk through off-balance sheet credit default swaps.[4] Some experts have said that regulated banking organizations are the largest shadow banks. No major investment banks exist in the United States other than those that are part of the regulated banking system. (In 2008, Morgan