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Shadow Banking Sector

Financial intermediaries involved in the creation of credit, but are not subject to regulatory oversight e.g hedge funds. This sector is exponentially growing and in 2013 grew by $5 trillion to $75 trillion, making up on average 25% of all financial assets, roughly half of the banking system assets, and 120% of GDP. This is a worrying trend as lower capital regulation imposed on these types of FIs raises fears of more bank failures and systemic crises.

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