Shadow banking refers to the credit intermediary system (including all kinds of related institutions and business activities) which is outside the banking supervision system and may lead to systemic risks and regulatory arbitrage.

"Shadow banking" is an important financial concept after the outbreak of the subprime mortgage crisis in the United States. It is a way to realize unlimited credit expansion through bank loan securitization. The core of this approach is to transform the traditional bank credit relationship into a credit relationship hidden in securitization.

"Shadow banking" has several basic characteristics:

Number one? The source of funds is greatly influenced by market liquidity.

Second,? Because its liabilities are not deposits, it is not subject to strict supervision by deposit currency institutions.

Third, because there is less supervision, the leverage ratio is higher. To put it bluntly, it has a financing and loan intermediary function similar to that of commercial banks, but it is outside the traditional monetary policy supervision of the monetary authorities.