3 Charts To Prove That ‘Shadow Banking’ Could Collapse The Entire Financial System
by Sprout Money
ZeroHedge.com
03/29/2015
Despite seeing the world economy and global financial system experiencing a total meltdown and despite multiple pledges from policy makers all over the world to ban shadow banking procedures, no steps have been taken at all. In fact, the world of shadow banking continues to expand and the total size of the shadow banking sector is expected to reach 100 trillion USD before the end of this decade (and very likely even sooner).
According to the number one of Hong Kong’s securities and futures commission in a Reuters article, more and larger players have entered the shadow banking market as in the current low yield environment more groups (think private equity) are looking to increase their returns. Consumer lending is obviously a preferred choice as it’s also quite easy to get into. It also causes some sort of Catch 22 problem. On the one hand are these new credit providers adding additional oxygen to the local economies as it enables families to keep or increase the consumption pattern. That’s also the main reason why regulators aren’t too keen on taking strict measures to shut these ‘enablers’ down.
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