Shadow banking involves accepting long-term savings deposits by investment banks to use as short-term loans to businesses.

Question

Quizplus · Accepted Answer

Shadow banking involves financial intermediaries engaging in credit intermediation outside the traditional banking system. It involves activities such as borrowing and lending, but without being subject to traditional banking regulations and oversight. The activities can include issuing short-term loans and taking on other high-risk financial activities. However, it does not involve accepting long-term savings deposits by investment banks to use as short-term loans to businesses.

Shadow Banking Involves Accepting Long-Term Savings Deposits by Investment Banks