This comparative study explores how shadow banking differs from the traditional banking system. It discusses the origins, history, purposes, risks, regulatory constraints, and projected future evolution of both financial sectors of the world economy. This thorough examination of non-bank financial intermediaries follows the migration of services from traditional banks to less-regulated alternative banking products, as well as the evolution of regulations and the Financial Stability Oversight Council to monitor these new entities. Three chapters explore in depth the major financial structures newly designated as systemically important financial institutions (SIFIs), with particular attention to insurance companies such as MetLife, which seek exemption from the designation. Finally, the focus shifts to international financial institutions' efforts to protect consumers and curtail irresponsible shadow banks, with an eye toward the effects of these actions on future banking practices.

Compares traditional and non-bank financing systems

1 Traditional Banking in the United States and Its Evolution as Bank Holding Companies.- 2 Shadow Banking.- 3 Governance of Shadow Bank Financial Institutions.- 4 Enhanced Prudential Standards.- 5 Securitization and Repos.- 6 Hedge Funds and Mutual Funds as SIFIs.- 7 Insurance Companies as SIFIs: The MetLife, Inc. Litigation.- 8 International Regulation of Shadow Banking.