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The Shadow Banking System And Its Role In Triggering The Global Crisis

Author

Listed:
  • Carmen BOGHEAN

    (Stefan cel Mare University, Faculty of Economics and Public Administration)

Abstract

Financial innovation, the deficiencies of corporate governance, moral hazard, easy money policies, government inefficiency, and mainly the activity of the shadow banking system have all played a critical role in setting off the global financial crisis. Due to the imbalances it has triggered, the shadow banking system has been at the core of the most widespread and profound world crisis of all time, as the attempt to use financial capital as efficiently as possible by resorting to “innovative” products has significantly contributed to the advent of the financial crisis. The present crisis has already proved that the banking and financial activity can have a deeply disturbing impact on our economy, but the flexibility of lending mechanisms and the various reactions of the players on the market that are otherwise inherent in a dynamic economic system, cannot exist in the absence of banking mechanisms.

Suggested Citation

  • Carmen BOGHEAN, 2015. "The Shadow Banking System And Its Role In Triggering The Global Crisis," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 7, pages 103-108, April.
    • Handle: RePEc:cmj:seapas:y:2015:i:7:p:103-108
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    More about this item

    Keywords

    Financial crisis; Financial system; Shadow banks; Financial innovations;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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