EVALUATING THE REASONS FOR THE RISE OF SHADOW BANKING IN THE UNITED STATE AND CHINA

Abstract

Shadow banking has rapidly grown in the United States and China over the years, which exhibits unique driving forces, components, players and risk profiles. Notwithstanding the differences between the two, they give rise to similar regulatory concerns, including systemic risk and regulatory arbitrage, difference is that China’s commercial and shadow banking systems are absent of many of the mechanisms that allowed the U.S. to regulate its way out of America’s financial crisis.