AOL: ….What’s bringing this issue to the forefront again is a new report by the Financial Stability Board, an international financial-standards advisory group. It cites that assets held in the global shadow banking system hit a new high last year: $67 trillion, which comes out to about half the world’s total banking assets.
In the report, the FSB formally describes the shadow banking system as “credit intermediation involving entities and activities outside the regular banking system.” Translated into English, this means the act of borrowing, lending, or otherwise shifting of money around by financial institutions that aren’t subject to regulation, like hedge funds. It can also refer to traditional banks operating in largely unregulated arenas such as credit-default swaps..
Since the crash, there’s been a vast amount of regulation aimed at addressing the shortfalls of the regular banking system — like Dodd-Frank and Basel III — but nothing to seriously curb the growth of the shadow banking system… (more)
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