Answer:
The shadow banking system refers to
A. non-bank financial institutions such as investment banks and hedge funds.
B. community banks.
C. pawn shops and institutions that offer payday loans.
D. commercial banks.
A. non-bank financial institutions such as investment banks and hedge
Explanation:
Shadow banking system is a system of banking that is carried out by non-financial institutions, where they act as financial intermediaries or helping hands. These institutions serve as the link between investors and businesses that need such funds.
Shadow banks include:
- investments banks,
- hedge funds and
- all non-depository banks.
Shadow banking is beneficial to the economy as it increases the sources of credit for individuals and business.
