Shadow banking is an important financial concept after the outbreak of American subprime mortgage crisis. It is a way of unlimited credit expansion through bank loan securitization. The core of this approach is to transform the traditional bank credit relationship into a credit relationship hidden in securitization. This kind of credit relationship looks like a traditional bank, but it only functions as a traditional bank without the organization of a traditional bank, that is, it exists like a shadow banking system.
Investment bank is one of the most important members of shadow banking. People often mention Wall Street, which means investment bank. In the contest with commercial banks, investment banks are better in talents, innovative means and technical level. It not only occupies a dominant position in the capital market, but also occupies the mainstream in derivatives and commodity trading. 、
Classification of shadow banking
1, generalization
Shadow banking in a broad sense includes inter-bank financing and other bank financing, inter-bank special purpose carrier investment, entrusted loans, fund trusts, trust loans, non-public offering funds, securities asset management, insurance asset management, asset securitization, non-equity private equity funds, loans provided by peer-to-peer lending P2P institutions, financial leasing companies, microfinance companies, commercial factoring companies, insurance guarantee companies, consumer loans issued by unlicensed institutions, debt financing plans and structured financing products provided by local exchanges.
2. Narrow sense
Among them, some banking businesses, such as inter-bank special-purpose carrier investment, inter-bank financing, non-standard debt financing investment, entrusted loans, trust loans, P2P loans in peer-to-peer lending, and non-equity private equity funds, have obvious characteristics and high risks, and belong to narrow shadow banking.
The role of shadow banking
Because banks urgently need to improve their battered balance sheets, the healthy operation of securitization market is particularly important, not only because it guarantees the borrowing ability of enterprises and consumers, but also because of its role in promoting economic growth and asset pricing.
Many factors lead to the impairment of securitization activities. Investors no longer trust the rating values of third parties such as Moody's and Standard & Poor's. At the same time, the losses that began in the US subprime mortgage market have more or less affected off-balance-sheet instruments such as SIV.
Although shadow banking is a non-bank institution, it does play a de facto banking function. They have built a bridge between subprime lenders and the market surplus funds and become the main intermediary for subprime lenders to raise funds. Shadow banks expand their liabilities and assets business on a large scale by issuing various complex financial derivatives in the financial market. All shadow banks interact to form a shadow banking system with credit and derivative relations.
This is all the answers about shadow banking.