Question

What is Shadow Banking?

A Foreign banks replicating operations of domestic banks for business expansion Correct Answer Incorrect Answer
B Banking system overpowering the economic system Correct Answer Incorrect Answer
C Financial Intermediation which is out of regulatory oversight Correct Answer Incorrect Answer
D Small banks making more transactions cumulatively than large banks Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

Shadow banking system refers to the financial intermediaries involved in facilitating the creation of credit but these are not subject to regulatory oversight. E.g. Hedge funds, unlisted derivatives and other instruments.

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