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True Size of the Shadow Banking System Revealed (Spoiler: Humongous)
KentuckyFC writes "The banking system is closely regulated and monitored by central banks and other government agencies. But it has become common practice for banks to get around this by doing business in ways that don't show up on conventional balance sheets. This so-called shadow banking system is thought to be huge, but nobody knows exactly how big. Now three econophysicists have discovered that the size distribution of the world's largest financial firms significantly differs from the size distribution of smaller ones or indeed non-financial firms. And they hypothesize that the difference is the result of the hidden transactions that make up the shadow banking system. By this new measure, the shadow banking system has grown dramatically since the financial crisis and was worth over $100 trillion in 2012, significantly more than had been thought and more even than the GDP of the entire planet. Nothing to worry about, then."
Then the feds decided this was bad and that they should fine them an extra $800 million.
WTF? Your own article says they were fined for hiding the loses. There are even criminal charges. It's legal to lose money, but it isn't legal to lie about it to regulators.
It's not hilarious, you just have to realize who controls the regulation and for WHOM the system is working. Hint: not you and me.
One thing it does is to block lenders of record (banks) from considering certain data like race
Sorry... if you're actually advocating loan decisions based on race, you belong in a different era. Going on to say "what it actually does" :
As a result banks cant price the risk for tons of very poor people that need loans
Most very poor people all loans are very very bad for. It is very, very rare that any loans are ever good for poor people. Banks gouge the poor more than their better off customers, and payday loans at 300% often end up cheaper than bank overdraft and late payment fees. Claiming banks would be the saviour of the poor, except for those darn regulations is not just disingenuous, it's close to trolling.