Will Shadow Banking be responsible for next Financial Crisis
Shadow Banking is an industry that has now surpassed the regular banking industry with its $71.2 trillion dollar pool which is growing.
The difference between the shadow banking industry and commercial banks is that they do not take deposits. And this is where it gets really confusing: basically, it is all about getting credit, or loans. But it has become dangerous in one area: collateral.
In this edition of the Economic Divide, we will explore how these intermediaries are giving loans to, in many cases, risky customers, which is what triggered the 2008 financial crisis, with China taking the lead, with about $4 trillion dollars in loans being pushed around.
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