Shadow Banking
Shadow Banking Shadow banking refers to financial services provided by institutions that are not traditional banks and are not regulated like banks. These services include lending, investing, and credit-related activities. The word "shadow" may sound suspicious, but it simply means these activities happen outside regular banking rules, not that they are illegal. Examples of shadow banking include: Hedge funds that lend money or invest in risky assets Money market funds that offer short-term loans to businesses Peer-to-peer lending platforms where individuals lend money directly to others Finance companies that offer car loans or personal loans These institutions play an important role in the financial system. They provide credit to people and businesses that may not qualify for traditional bank loans. Shadow banking can also help spread financial risk and increase access to funding. However, because they are not watched as closely as banks, shadow ...