Shadow banking: benefits, risks, and regulatory implications

Regular banks are no longer the center of attention in the financial system. After the global financial crisis of 2007-2008, regulatory authorities are focusing on a new form of financial intermediation. This new form of credit intermediation is unregulated, market-based, and bank-alike. The crisis revealed that shadow banks have become one of the main actors in the financial system. Consequently, shadow banking system has the ability to threat the stability of not only the whole financial system, but also the whole economy. This master dissertation presents a general literature review on the shadow banking topic. In addition, a major part has been dedicated to clarify the current shadow banking regulatory framework. Finally, we put forward the discussion of several questions that are interesting for future research.