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Glite Dictionary
shadow banking system

shadow banking system

1 7.7
Financial companies that lend, borrow, or manage money without normal bank rules
  • noun
  • /ˈʃædoʊ ˈbæŋkɪŋ ˈsɪstəm/
  • Specialized
translation icon : sistema de banca en la sombra
  • Securitization is what animates the global financial and shadow banking system in whose shadow we now live.

So could you do your best to explain, explain to the layperson like me what is a shadow banking system?

Examples

  • The United States had the largest shadow banking system, said the FSB, with assets of $23 trillion in 2011.

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  • The idea here is to eliminate exposure to the shadow banking system and reduce its size.

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  • At the center of all debates about the banking crisis, the shadow banking system, and the bank bailouts is debt.

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  • This time, the topic is the emergence of the so-called shadow banking system.

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  • The end of the shadow banking system is actually a boon to Citicorp and Bank of America.

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  • The shadow-banking system refers to the rapid growth in recent years of non-bank financing mechanisms such as commercial paper markets, structured investment vehicles, specialized debt instruments, and the investment banks themselves.

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  • The shadow banking system includes various entities like hedge funds that operate outside regular banking regulations.

  • Regulators are concerned about the risks associated with the shadow banking system, as it lacks transparency.

  • The shadow banking system has grown significantly, creating challenges for financial stability worldwide.

Surface Forms

shadow banking system singular
shadow banking systems plural

Morphology

shadow + banking + system

The constituents 'banking' + 'system' clearly signal a network of financial activity, and 'shadow' can be interpreted as 'hidden' or 'informal', so a learner who knows the words could infer something like an unofficial or hidden banking network. However, the technical nuance that these intermediaries perform bank-like functions outside normal regulation is specialized and not fully predictable from the parts alone, making the expression only partly transparent to a B1 learner.

Etymology

Shadow banking system uses the image of a shadow hiding the actions of a banking system. It means groups or funds that do bank jobs like lending money but stay 'out of sight' and do not follow the usual bank rules.