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Transcript of SHADOW BANKING
WHAT IS SHADOW BANKING??
The financial intermediaries involved in facilitating the creation of credit across the global financial system, but whose members are not subject to regulatory oversight.
It is parallel to the traditional banking system, that performs similar functions but through specialized financial institutions.
In Malaysia, it is defined as a system of credit intermediaton that involves entities and activities beyond the regulatory purview of BNM.
HOW IT WORKS??
In terms of sources of fund:
They get the fund from the investors by issuing out bond.
The bond comes from securtizing system where all loans from borrowers are pooled together.
Capital adequacy: There is no minimum amount of money needed that will act as cushion
Easier compared to traditional banking.
BY: ADLYNN AISYAH BINTI BANI AMIN
The reason for such concern is plain to see from the staggering numbers those institutions are now showing.
The number of NBFIs that give out loans has increased.
It contributes to the rising household debt.
The main reason for people to apply for loan is for personal loan.
Last year, the NBFIs gave out 43 billion ringgit (US$13.4 billion) in new personal financing facilities.
Non-Banking Financial Institutions (NBFIs) in Malaysia
Malaysia Building Society Berhad (MBSB)
RCE Capital Berhad