Shadow banking can be thought of as the collection of instruments, structures, firms or markets which, alone or in combination, and to a greater or lesser extent, replicate the core features of commercial banks: liquidity services, maturity mismatch and leverage. They are often considered a product of 'regulatory arbitrage' and can be problematic if the resulting non-bank forms of financial intermediation replicate the systemic risks posed by banking itself.
Published on
21 January 2010