# Shadow banking

`kaal:entity:shadow-banking`

**Status.** derived

This node is assembled mechanically from the 7 claims that carry the concept tag `shadow-banking`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

7 claims across 5 works, 2014 to 2017.

**2014**

- [2470008-010](https://wulfkaal.github.io/claims/2470008-010) [mechanism/argued] -- Because private fund advisers supply liquidity and perform liquidity transformation in the manner of banks, the vulnerabilities their bank like activities create can carry large consequences for financial stability.
  > Like banks, private fund advisers can provide liquidity to clients and to financial markets and engage in various forms of liquidity transformation. The vulnerabilities created by private fund advisers engaging in bank-like activities may have large implications for financial stability.
  Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008

**2016**

- [2739479-011](https://wulfkaal.github.io/claims/2739479-011) [mechanism/argued] *(failure mode)* -- Because the Dodd-Frank Act discouraged banks from growing too large and made bank lending harder, private funds and other alternative lenders filled the resulting void by financing small and medium sized businesses that traditional banks no longer served.
  > In essence, because the Dodd-Frank Act discouraged banks from getting too big, private funds and other alternative lenders filled the void, providing fi- nancing to the small- and medium-size businesses that traditional banks were no longer equipped to serve.
  Wulf A. Kaal, The Post Dodd-Frank Act Evolution of the Private Fund Industry Comparative Evidence from 2012 and 2 (2016). SSRN: https://ssrn.com/abstract=2739479
- [2748096-009](https://wulfkaal.github.io/claims/2748096-009) [mechanism/asserted] -- Private fund advisers in the shadow banking system perform bank-like functions, providing liquidity to clients and to financial markets and engaging in various forms of liquidity transformation, and the vulnerabilities this creates may have large implications for financial stability.
  > Like banks, private fund advisers can provide liquidity to clients and to financial markets and engage in various forms of liquidity transformation. The vulnerabilities created by private fund advisers engaging in bank-like activities may have large implications for financial stability.
  Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096
- [2748096-011](https://wulfkaal.github.io/claims/2748096-011) [failure/argued] *(failure mode)* -- The opacity of the hedge fund shadow banking system blocks direct measurement of hedge funds' role in the crisis, leaving researchers with indirect measures extracted from existing data rather than primary pre-crisis sources.
  > the shadow banking system of hedge funds and the lack of sufficient transparency create substantial obstacles to implementing direct measures, especially without the access to primary sources of data regarding hedge funds before the crisis.
  Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096
- [2748096-038](https://wulfkaal.github.io/claims/2748096-038) [mechanism/argued] -- Hedge funds now supply funding to the banking system that may be rapidly withdrawn during a liquidity crisis and supply a substantial share of the sellers' side of the credit default swap market, thereby assuming risks traditionally held by investment banks and insurance companies.
  > He highlights the risk that hedge funds are providing funding to the banking system, which may be rapidly withdrawn during a liquidity crisis.
  Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096

**2017**

- [3002908-022](https://wulfkaal.github.io/claims/3002908-022) [mechanism/argued] -- Post crisis regulation that restrained bank lending, particularly to SMEs, opened a new market that private investment funds moved into, accelerating their involvement in banking functions.
  > After the crisis, newly issued regulation restrained banks from lending, in particular to SMEs. This opened up a new market for private investment funds that stepped into the void left by the new regulatory regime.
  Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908
- [3067615-007](https://wulfkaal.github.io/claims/3067615-007) [mechanism/argued] -- The rapid evolution of ICOs was enabled in part by the negative factors that had depressed start-up fundraising, namely post crisis banking regulation and a shadow banking sector that only marginally supports new ventures and highly innovative start-ups.
  > ICOs' rapid evolution was enabled in part by these negative factors that affected start-up fundraising.
  Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/shadow-banking.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.