This comparative study explores how shadow banking differs from the traditional banking system. It discusses the origins, history, purposes, risks, regulatory constraints, and projected
future evolution of both financial sectors of the world economy. This thorough examination of non-bank financial intermediaries follows the migration of services from traditional banks to
less-regulated alternative banking products, as well as the evolution of regulations and the Financial Stability Oversight Council to monitor these new entities. Three chapters explore in depth
the major financial structures newly designated as systemically important financial institutions (SIFIs), with particular attention to insurance companies such as MetLife, which seek
exemption from the designation. Finally, the focus shifts to international financial institutions’ efforts to protect consumers and curtail irresponsible shadow banks, with an eye toward the
effects of these actions on future banking practices.
