Despite all that is said about financial reform, the shadow banking system that helped create the financial crisis would remain fundamentally unaltered by the legislation now pending in Congress. Indeed, leveraged entities such as private-equity, venture-capital, and hedge funds get only minor regulatory attention. These barely regulated, nontransparent bastions of speculation propagated systemic risks beyond any that could be created by the banks themselves. Whether housed at banks, created by banks, or freestanding, they exist to enable speculative risk-taking hidden from either regulatory or market scrutiny while camouflaging layers of debt and enabling the complex-securitization deals that caused the financial collapse.
Neither the House bill passed last December nor the most recent Senate bill submitted by Sen. Chris Dodd does more than impose marginal adjustments on the shadow banking system. Even those measures contain loopholes so inviting that JPMorgan Chase, the largest hedge-fund manager by assets worldwide, scoffs at the notion it will be adversely affected.
Follow this link for more details on Shadow banking and what its affects on you and your economy.
http://marketplace.publicradio.org/collections/coll_display.php?coll_id=20216
First off, I have never heard of money shadowing, and second, it makes me made how the regular public and those following guidelines on selling financial products have been handed the blame for our current economical status. The truth is finally told right here.
ReplyDeleteKeep up the good reporting.