The role of the shadow banking in the Global Financial Crisis and some implications for regulation of Vietnam Financial market

Abstract

Since the 1970s until the Global Financial Crisis (GFC) in 2007, the financial market
witnessed the introduction and rapid growth of non-bank institutions which are called
shadow banks. Shadow banking is considered as a result of financial innovation (Jackson
2013), helping banks to meet the demand of their customers, especially institutional
depositors as well as increasing their profitability. This article will analyse the importance
of shadow banking in the financial system and the role of them in the 2007 crisis. This
will also describe the Vietnam shadow banking system and suggest some possible
recommendations to regulate the systemic risk associated with this system.