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Shadow Banking: A Practical Approach

Shadow Banking: A Practical Approach

Antonio Javier Grandío Dopico, José Álvarez Cobelas
Copyright: © 2020 |Pages: 21
ISBN13: 9781799824404|ISBN10: 1799824403|ISBN13 Softcover: 9781799824435|EISBN13: 9781799824411
DOI: 10.4018/978-1-7998-2440-4.ch006
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MLA

Grandío Dopico, Antonio Javier, and José Álvarez Cobelas. "Shadow Banking: A Practical Approach." Emerging Tools and Strategies for Financial Management, edited by Begoña Álvarez-García and José-Pablo Abeal-Vázquez, IGI Global, 2020, pp. 131-151. https://doi.org/10.4018/978-1-7998-2440-4.ch006

APA

Grandío Dopico, A. J. & Álvarez Cobelas, J. (2020). Shadow Banking: A Practical Approach. In B. Álvarez-García & J. Abeal-Vázquez (Eds.), Emerging Tools and Strategies for Financial Management (pp. 131-151). IGI Global. https://doi.org/10.4018/978-1-7998-2440-4.ch006

Chicago

Grandío Dopico, Antonio Javier, and José Álvarez Cobelas. "Shadow Banking: A Practical Approach." In Emerging Tools and Strategies for Financial Management, edited by Begoña Álvarez-García and José-Pablo Abeal-Vázquez, 131-151. Hershey, PA: IGI Global, 2020. https://doi.org/10.4018/978-1-7998-2440-4.ch006

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Abstract

Shadow banking has gained prominence in recent years, and especially after the world financial and economic crisis because, on the one hand, it favours the funding of firms that have difficulty accessing the tradicional banking system, and, on the other hand, it offers to investors alternatives to the traditional bank deposits. However, shadow banking involves risks because it is subject to a lower level of regulation than the traditional system and it is clearly pro-cyclical, contributing to worsening the economic climate in times of recession. The chapter shows in detail how the shadow banking works and what the advantages and disadvantages of this alternative system are. In addition, reference is made to the debate about the possibility of reinforcing the regulation of this sector, although so far, the supervisory authorities prefer maintaining a vigilant attitude while not imposing strict requirements, which would lead to limit the role played by shadow banking.

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