Efforts to make banks safer can effectively push risk into other sectors of finance
More restrictions imposed on banks will inevitably lead to more financial intermediation taking place outside the banking system.
It can move into money market funds, commercial credit lenders, fintech, insurance companies, trade credit, and elsewhere.
These institutions are generally less regulated than are banks and don’t have the same kind of direct access to the Federal Reserve’s discount window.
Tyler Cowen Bloomberg 27 mars 2023
Shadow banks controlled $225 trillion at the end of 2020, or nearly half of all global financial assets
https://englundmacro.blogspot.com/2022/11/banks-need-to-worry-about-shadow-banks.html
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