Simply put, shadow banks are financial institutions that can provide credit but are not banks. In China, the CBRC and the central bank cannot supervise them. Because it can't be supervised, its influence on currency, including the speed and scale of circulation, can't be accurately estimated, so people began to pay attention after the subprime mortgage crisis.
China's "shadow banking" is caused by financial repression. On the one hand, the formal investment channels are seriously insufficient, and the idle funds of private capital do not have enough investment products. On the other hand, state-owned enterprises monopolize the credit funds of banking institutions, so it is difficult for private enterprises to obtain loans through formal channels, and they can only obtain loans through other gray channels. Folk credit is one of the important channels.
It can be understood that one of the important components of China's shadow banking is to provide institutions in folk credit. Its appearance is the natural evolution result of the profit-seeking characteristics of funds, which makes up for the deficiency of the formal financing system to some extent.
If you want to know more in detail, you can look at this report:
/story/00 1037947？ Page=2 (China's "shadow banking" Author: Henny, Financial Times? Sandel)
This is a simplified version of the abstracts of several reports I have read. I hope it helps ~ ~