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Criticality Analysis of Shadow Banking System Deregulation

Published in Economics (Volume 9, Issue 3)
Received: 28 June 2020     Accepted: 13 July 2020     Published: 10 August 2020
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Abstract

The objective of our article is to analyze the criticality of the deregulation of shadow banking system in different economic environments. It is defined like a financial intermediation system carried out outside the framework of classical banking and financial activities. Shadow banking system shows a lot of advantages in terms of the financing of the economy. It is an alternative for the investors and the economic agents. So it constitutes an alternative solution to the problematic of access to financial products of the classical banking system. It offers a possibility of diversification and socialization of risks while allowing an objective and more efficient allocation of financial resources without major constraint. Its activities are not illegal and it completes the classical financial banking system. Its usefulness is well established, but the need for its supervision remains an essential concern for economic agents. If shadow banking system is not regulated, it can bring about, in the market of capitals, toxic financial titles which are created by less credible financial entities. This can cause a disturbance of the economy and a deregulation of the global financial system. Like any other financial system, shadow banking has some risks which it spreads in the economic system if an adequate regulation, with well- established norms, does not govern its implementation.

Published in Economics (Volume 9, Issue 3)
DOI 10.11648/j.eco.20200903.12
Page(s) 60-65
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Financial System, Shadow Banking, Regulation, Monetary System, Banking System

References
[1] Betbeze Jean Paul (2015), “Shadow banking versus Banking”, Eyrolles Group Paris – France.
[2] Blanque Pascal (2015), “Market finance, changes in financing for the economy and risk”, Eyrolles Group.
[3] Baudu François and Constantin MELLIOS, (2015) “Shadow banking, an alternative in financing the economy?” Eyrolles Edition.
[4] Chambon Jean Louis (2015), “Shadow banking, what is parallel finance”, Eyrolles Edition Paris - France.
[5] Adam Smith (1776), “the nature and causes of the wealth”, Garner collection and Flammarion edition.
[6] Thomas MALTHUS (1798), “Essay on the Principle of the Population”, Edition Flammarion Paris, Flammarion, France.
[7] David Ricardo (1817), “Principles of Political Economy and Taxation”, Garnier collection Flammarion Edition Paris, 1992.
[8] Say Jean Baptiste (1803), “Treaty of Political economy”, Calmann-Levy Editor Paris.
[9] Cantillon Richard (1755), “Essay on the nature of trade in General”, Institute - Coppet Paris 2011- pp 228-235.
[10] Condillac Etienne Bonnot (1775), “commerce and government considered in their mutual relationship”, Jombert and Cellot Edition and bookstore street Dauphine France.
[11] Bentham Jérémie (1768), “On judicial organization and codification”, Belgian Society of Bookstores pp 466-495.
[12] Bastiat F (1850), “The Law”, Mugron Edition Charbon Collection Paris –pp 201-219.
[13] Nouy Daniele (2013), French banking supervisory authority report 2013.
[14] Plihon D (2010), “The reform of financial regulation”, French notebooks n ° 359, Paris, France.
[15] Mishkin, F. (2017), “The Economics of Money, banking, and financial markets”, 10/e edition, new horizons Paris pp 264-279.
[16] Pons J. F. and CYRILLE Causse, C. (2013), “Bank and Strategy”, Analyze Economica n ° 301, p. 59 Right, Vol. 16, 5-21, N30.
[17] Aglietta Michel (2014), “Shadow Banking carries a risk of collective illiquidity”, Paris Nanterre University. AGEFI. PARIS.
[18] Pastre Olivier and Jean Marc Sylvestre (2007), “The true novel of the financial crisis”. Perrin Edition, 300p, p 45.
[19] Shaxson Nicholas (2012), “Tax havens, investigations into the ravages of neoliberal finance”, André Versaille Publisher.
[20] De Boisseu Christian (2015), “shadow banking: opportunity for operators, challenge for regulators”, Eyrolles Group France.
[21] Shaw E and KINNON. Mc (1973), “Financial Aspects of Economic Development, American Economic Review, USA Vol. 45, pp. 728-738.
[22] Financial Stability Board (2020), the Global Monitoring Report on Non - Bank Financial Intermediation», annual report on non-bank financial intermediation.
[23] Vernier Eric (2017), “Whitening technical and means of fight”, Dunod Paris France.
[24] Bowman Joel (2018), «Insights into the economy and financial system from teams» Reserve Bank of Australia Bulletin March 2018.
[25] Ottavj Christian (2014), “Currency and financing of the economy”, Hachette Livre.
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    Mamadou Mbaye. (2020). Criticality Analysis of Shadow Banking System Deregulation. Economics, 9(3), 60-65. https://doi.org/10.11648/j.eco.20200903.12

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    Mamadou Mbaye. Criticality Analysis of Shadow Banking System Deregulation. Economics. 2020, 9(3), 60-65. doi: 10.11648/j.eco.20200903.12

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    Mamadou Mbaye. Criticality Analysis of Shadow Banking System Deregulation. Economics. 2020;9(3):60-65. doi: 10.11648/j.eco.20200903.12

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  • @article{10.11648/j.eco.20200903.12,
      author = {Mamadou Mbaye},
      title = {Criticality Analysis of Shadow Banking System Deregulation},
      journal = {Economics},
      volume = {9},
      number = {3},
      pages = {60-65},
      doi = {10.11648/j.eco.20200903.12},
      url = {https://doi.org/10.11648/j.eco.20200903.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20200903.12},
      abstract = {The objective of our article is to analyze the criticality of the deregulation of shadow banking system in different economic environments. It is defined like a financial intermediation system carried out outside the framework of classical banking and financial activities. Shadow banking system shows a lot of advantages in terms of the financing of the economy. It is an alternative for the investors and the economic agents. So it constitutes an alternative solution to the problematic of access to financial products of the classical banking system. It offers a possibility of diversification and socialization of risks while allowing an objective and more efficient allocation of financial resources without major constraint. Its activities are not illegal and it completes the classical financial banking system. Its usefulness is well established, but the need for its supervision remains an essential concern for economic agents. If shadow banking system is not regulated, it can bring about, in the market of capitals, toxic financial titles which are created by less credible financial entities. This can cause a disturbance of the economy and a deregulation of the global financial system. Like any other financial system, shadow banking has some risks which it spreads in the economic system if an adequate regulation, with well- established norms, does not govern its implementation.},
     year = {2020}
    }
    

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  • TY  - JOUR
    T1  - Criticality Analysis of Shadow Banking System Deregulation
    AU  - Mamadou Mbaye
    Y1  - 2020/08/10
    PY  - 2020
    N1  - https://doi.org/10.11648/j.eco.20200903.12
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    AB  - The objective of our article is to analyze the criticality of the deregulation of shadow banking system in different economic environments. It is defined like a financial intermediation system carried out outside the framework of classical banking and financial activities. Shadow banking system shows a lot of advantages in terms of the financing of the economy. It is an alternative for the investors and the economic agents. So it constitutes an alternative solution to the problematic of access to financial products of the classical banking system. It offers a possibility of diversification and socialization of risks while allowing an objective and more efficient allocation of financial resources without major constraint. Its activities are not illegal and it completes the classical financial banking system. Its usefulness is well established, but the need for its supervision remains an essential concern for economic agents. If shadow banking system is not regulated, it can bring about, in the market of capitals, toxic financial titles which are created by less credible financial entities. This can cause a disturbance of the economy and a deregulation of the global financial system. Like any other financial system, shadow banking has some risks which it spreads in the economic system if an adequate regulation, with well- established norms, does not govern its implementation.
    VL  - 9
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Author Information
  • Management of Organization Department, Economic and Social Sciences Research and Training Unit, University of Thies, Thies, Senegal

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