The
shadow banking industry plays a critical role in meeting rising credit demand in the United States, and
although it's been argued that
shadow banking's disintermediation can increase economic efficiency, its operation outside of traditional
banking regulations raises concerns over the systemic risk it may pose to the financial system.
Judging from the latest hard data, the outlook for 2016 remains relatively encouraging,
although regulatory uncertainty has made a forceful comeback and is casting a
shadow over the ongoing progress in the sector,» says Jan Schildbach,
banking analyst at Deutsche
Bank Research, in a note on the sector.