Shadow banking: still big, still dangerous

The part of the financial system that lends the most money to Americans remains almost untouched by regulation. It's shadow banking, as Paddy Hirsch explains.

Category:

Education

Tags:

• marketplace
• whiteboard
• shadow
• banking
• finance
• business
• economics
• bank
• america
• paddy
• hirsch
• economy

[metals0999]

@ChefEarthenware no, you are a smart citizen...

[vinmorin]

@ChefEarthenware No, you are known as a smart citizen.

[gulllars]

What is riciculous is that the banks (and financial corporations) aren't subject to the same competition regulation as non-financial corporations (tech f.ex.)

If a bank is so big it will crash the entire financial system of a country if it fails, it can not be allowed to take risks that could crash it. If it does it's dangerous recklessness and incompetence, or undermining national security.

[3verything3lse]

I learned that banks come in different shapes & sizes

[abc123icuucme]

@DCUPtoejuice No we don't have a choice and it's not because they are 'too big to fail' it's because they have paid not to fail. Pay your congressman more bribes than them and you can have what you want.

[ChefEarthenware]

"I put my money in the Bank every month like a good citizen.." - so if I don't use a Bank then I am a bad citizen?

[DCUPtoejuice]

too big to fail implies we don't have a choice. we do. we could let them fail and deal with the fallout by restructuring

[globalfinanceschool]

Great presentation!

[Mulligan71991]

@dishesdealer417 I think you don't acknowledge that the fed is NOT an elitist organization. I mean Geithner earns less than most heads of central banks in the world...You need to realize that the money lent to the banks is never given to the bankers. Its so that banks have capital to continue lending to businesses which you probably work for. Also the 0% interest rate is because the economy has stopped growing. Its called a stimulus package for a reason lol

[chillercm]

@dishesdealer417 As for the fed loaning money. You need to understand that none of this money goes directly into bankers pockets. What happens is it gets lent out to businesses. If that didn't happen the recession would be far far worse. When you hear about bankers getting large salaries and bonuses its because of the interest that gets payed back from those businesses who borrowed the money. It might also be because some of that money was invested in businesses. No ones getting free money here!