Shadow Banking System


Shadow Banking System
The financial intermediaries involved in facilitating the creation of credit across the global financial system, but whose members are not subject to regulatory oversight. The shadow banking system also refers to unregulated activities by regulated institutions.

Examples of intermediaries not subject to regulation include hedge funds, unlisted derivatives and other unlisted instruments. Examples of unregulated activities by regulated institutions include credit default swaps.

The shadow banking system has escaped regulation primarily because it did not accept traditional bank deposits. As a result, many of the institutions and instruments were able to employ higher market, credit and liquidity risks, and did not have capital requirements commensurate with those risks. Subsequent to the subprime meltdown in 2008, the activities of the shadow banking system came under increasing scrutiny and regulations.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Shadow banking system — The “shadow banking system” or the “shadow financial system” is largely formed by non bank financial institutions that like banks, borrow short and in liquid forms and lend or invest long in more illiquid assets… …   Wikipedia

  • shadow banking system — noun Non bank financial institutions, that, like banks, borrow short and in liquid forms and lend or invest long in more illiquid assets. See Also: shadow bank …   Wiktionary

  • shadow banking system — noun financial institutions, viewed collectively, which are not banks, as funds or investment companies, and which are not subject to the same regulation as banks. Abbrev.: SBS …   Australian English dictionary

  • Shadow IT — is a term often used to describe IT systems and IT solutions built and used inside organizations without organizational approval. Shadow IT is by many considered an important source for innovation and such systems may turn out to be prototypes… …   Wikipedia

  • shadow bank — UK US noun [C] FINANCE, BANKING ► an organization or company that is involved in financial activities such as lending or investing money, but is not officially a bank and does not accept deposits, so does not have to obey the same rules as banks …   Financial and business terms

  • Shadow government — A shadow government is a government in waiting that remains in waiting with the intention of taking control of a government in response to some event.PoliticsIn parliamentary governments, the largest opposition party often refers to itself as a… …   Wikipedia

  • Non-banking financial company — Non bank financial companies (NBFCs) are financial institutions that provide banking services without meeting the legal definition of a bank, i.e. one that does not hold a banking license. These institutions are not allowed to take deposits from… …   Wikipedia

  • Global Positioning System — GPS redirects here. For other uses, see GPS (disambiguation). Geodesy Fundamentals …   Wikipedia

  • List of areas in the United States National Park System — National Park Service logo. The National Park System of the United States is the collection of physical properties owned or administered by the National Park Service. This includes all areas designated National Parks and most National Monuments,… …   Wikipedia

  • Late-2000s financial crisis — The TED spread (in red) increased significantly during the financial crisis, reflecting an increase in perceived credit risk …   Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.