Read the above article about “shadow banks in China” and discuss the following.

Read the above article about “shadow banks in China” and discuss the following.

Read the above article about “shadow banks in China” and discuss the following. Should China outlaw shadow banks? What would be the pros and cons of that? As mentioned in the article the US also has a large sector of shadow banks, should the US outlaw shadow banks? Why is your answer the same or different about the US as compared to China?

Your response must be 400 to 600 words.

Solution Preview

China should outlaw shadow banks. This is because, these banks pose a high risk to the financial stability of China. Unregulated lending adds to levels of massive debt as well as products of murky investment sold by insurance. There are various advantages as well as disadvantages of China outlawing shadow banks. One of the advantages is that these banks are not backed by the central bank and if depositors wanted to withdraw their cash, there would be no any kind of backup to save the banks. The

(427 words)