Fifth, shadow banking decreases the energy of financial policy (Estrella, 2002).

Fifth, shadow banking decreases the energy of financial policy (Estrella, 2002).

This really is partially because shadow banking is certainly not controlled into the way that is same old-fashioned banks, but for the reason that securitization insulates banks’ lending activity through the funds acquired from the main bank (Gertchev, 2009). Quite simply, such banks’ lending depends less from the capital from main banking institutions or regulatory demands on money and much more from the wellfunctioning money markets, including shadow banking, and their need for securitized assets. Read more