1. Define shadow banking and provide one example of the same.
2. How significant was the shadow banking phenomenon in contributing to the financial crisis. What role did money-market mutual funds play?
3. Where do you stand on the tradeoff between innovation and regulation? Innovations like shadow banking can have benefits for users/investors but also increase financial stability risk. Cite an example from personal experience (or readings) to make your point.

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Shadow Banking Explained Shadow banking refers to a network of financial institutions and activities that operate outside the traditional regulated ba... View the full answer