Abstract
The objective of our article is to analyze the criticality of the deregulation of shadow banking system in different economic environments. It is defined like a financial intermediation system carried out outside the framework of classical banking and financial activities. Shadow banking system shows a lot of advantages in terms of the financing of the economy. It is an alternative for the investors and the economic agents. So it constitutes an alternative solution to the problematic of access to financial products of the classical banking system. It offers a possibility of diversification and socialization of risks while allowing an objective and more efficient allocation of financial resources without major constraint. Its activities are not illegal and it completes the classical financial banking system. Its usefulness is well established, but the need for its supervision remains an essential concern for economic agents. If shadow banking system is not regulated, it can bring about, in the market of capitals, toxic financial titles which are created by less credible financial entities. This can cause a disturbance of the economy and a deregulation of the global financial system. Like any other financial system, shadow banking has some risks which it spreads in the economic system if an adequate regulation, with well- established norms, does not govern its implementation.
Highlights
Most often, shadow banking takes over from traditional finance
In addition to providing economic agents with an additional platform for monetization, fundraising, and risk transfer, shadow banking facilitates the financialization of the real economy through non-bank, expert and specialized entities, intervening at lower cost in the intermediation chain [2]
By revisiting the economic thought through the literary works of the precursors of the discipline, we find the theoretical fundamentals of shadow banking and we realize that the path of its emergence has been marked for a very good time
Summary
Shadow banking takes over from traditional finance. The latter, harassed and over-regulated [1], is unable to properly play its original role in supporting the real economy. Shadow banking assures important functions in the financial system; it offers additional sources of financing and investors alternative solutions; it can, in particular, be a source of systemic risk [3]. Shadow banking innovates in terms of funding and in terms of risks, the most obvious of which are the opacity, non-transparency of information, and incomplete traceability of operations. It appears itself as a lever for easing prudential standards while being a breathing space that both competes, complements, and sometimes replaces the traditional system. This assumption is Economics 2020; 9(3): 60-65 supported by current globalization and the decompartmentalization of the international financial system
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