What Is Shadow Banking? Discuss The Main Reasons Why Banks Become Involved In Securitisation Activity. Explain How And Why The Risk Associated With The Securitisation Process Was Miscalculated Before 2007.
The shadow banking system is understood as a set of financial institutions that carry out banking operations but do not have a bank license. This system began to develop actively in the early 2000s, and to date, the volume of its operations has approached 100% of world GDP. The American economist Paul McCully introduced the term “shadow bank” in 2007. Shadow banking participants include structural investment companies, hedge funds, investment

