{"id":9601,"date":"2015-07-01T07:25:47","date_gmt":"2015-07-01T12:25:47","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9601"},"modified":"2015-07-01T07:26:44","modified_gmt":"2015-07-01T12:26:44","slug":"the-75-trillion-dollar-shadow-banking-system-is-in-danger-of-collapsing","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9601","title":{"rendered":"The 75 Trillion Dollar Shadow Banking System Is In Danger Of Collapsing"},"content":{"rendered":"

The 75 Trillion Dollar Shadow Banking System Is In Danger Of Collapsing<\/a><\/h3>\n

\"Shadow<\/a>Keep an eye on the shadow banking system \u2013 it is about to be shaken to the core.\u00a0 According\u00a0to the Financial Stability Board<\/a>, the size of the global shadow banking system has reached an astounding\u00a075 trillion dollars<\/strong>.\u00a0 It has approximately tripled in size since 2002.\u00a0 In the U.S. alone, the size of the shadow banking system is approximately\u00a024 trillion dollars<\/a>.\u00a0 At this point, shadow banking assets in the United States are even greater than those of conventional banks.\u00a0 These shadow banks are largely unregulated, but governments around the world have been extremely hesitant to crack down on them because these nonbank lenders have helped fuel economic growth.\u00a0 But in the end, we will all likely pay a very great price for allowing these exceedingly reckless financial institutions to run wild.<\/p>\n

If you are not familiar with the \u201cshadow banking system\u201d, the following is a pretty good definition\u00a0from investing answers.com<\/a>\u2026<\/p>\n

The shadow banking system (or shadow financial system) is a network of financial institutions comprised of non-depository banks \u2014 e.g., investment banks, structured investment vehicles (SIVs), conduits, hedge funds, non-bank financial institutions and money market funds.<\/p>\n

How it works\/Example:<\/p>\n

Shadow banking institutions generally serve as intermediaries between investors and borrowers, providing credit and capital for investors, institutional investors, and corporations, and profiting from fees and\/or from the arbitrage in interest rates.<\/p>\n

Because shadow banking institutions don\u2019t receive traditional deposits like a depository bank, they have escaped most regulatory limits and laws imposed on the traditional banking system. Members are able to operate without being subject to regulatory oversight for unregulated activities. An example of an unregulated activity is a credit default swap (CDS).<\/p><\/blockquote>\n

These institutions are extremely dangerous because they are highly leveraged and they are behaving very recklessly.\u00a0 They played a major role during the financial crisis of 2008, and\u00a0even the New York Fed admits<\/a>\u00a0that shadow banking has \u201cincreased the fragility of the entire financial system\u201d\u2026<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

The 75 Trillion Dollar Shadow Banking System Is In Danger Of Collapsing Keep an eye on the shadow banking system \u2013 it is about to be shaken to the core.\u00a0 According\u00a0to the Financial Stability Board, the size of the global shadow banking system has reached an astounding\u00a075 trillion dollars.\u00a0 It has approximately tripled in size […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[61,63,240,6061,314,6872,6873,6874,6875,6876,6877,6878,6879,6880,6881,6882],"class_list":["post-9601","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banking","tag-banks","tag-economic-growth","tag-financial","tag-financial-institutions","tag-financial-stability","tag-global-shadow-banking-system","tag-reckless-financial-institutions","tag-shadow-bank","tag-shadow-banking","tag-shadow-banking-assets","tag-shadow-banking-system","tag-shadow-banks","tag-shadow-banks-unregulated","tag-the-shadow-banking-system","tag-the-size-of-the-shadow-banking-system"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9601","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9601"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9601\/revisions"}],"predecessor-version":[{"id":9603,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9601\/revisions\/9603"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9601"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9601"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9601"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}