Shadow Banks – are they a problem?

A Debunking Economics listener asked for a podcast on the role of Shadow Banks. In particular, he wanted to know if shadow banks create money in the same way as conventional banks. The quick answer is, no, because they are not able to create deposits – but they do increase the ability for banks to extend more loans. Phil Dobbie talks to Prof Steve Keen about the role of shadow banks and asks, do they need to be curtailed? And, if so, how? It’s an issue that’s been flagged by Janet Yellen, Governor of the Federal Reserve in the US, who flagged that the influence of shadow banking on the financial system is hard to measure.

To hear the full version subscribe by picking a plan in the right column of the Debunking Economics website (not the mobile app). Or become a patron at https://www.patreon.com/ProfSteveKeen

Leave a Reply

Your email address will not be published.

Scroll to top