"In recent years, shadow banking has grown to rival traditional banking in its application and influence. However, its role in creating the real estate bubbles that burst in the late-2000s is frequently labelled as one of the major causes of the global financial crisis. This book provides a complete overview of the shadow banking system from a legal and economic perspective. Chapters define the current regulatory framework of shadow banking and explore its impact on financial institutions. By analysing the rules governing this market-based financial framework, the author explores the functions of the system, and investigates its entities, operations and risks. He suggests that unregulated banking and finance, and the current lack of supervision in shadow banking, is a market failure. The book identifies a need for transparency in the shadow areas of capital markets, and finally proposes a solution to strengthen the management of shadow banking entities and operations." -- Back cover.