Regulating the Shadow Banking System - The Money View

The transcript discusses the ongoing financial crisis, highlighting the limitations of the Dodd Frank legislation in addressing modern financial systems, particularly the shadow banking system. It emphasizes the need for new regulatory frameworks to adapt to the shift from traditional banking to capital markets. The discussion also covers the breakdown of securitization markets and their interaction with traditional banking, pointing out the lack of understanding of these interconnections. The conclusion stresses the importance of developing intellectual frameworks to ensure the stability and safety of modern financial systems.

What is one major limitation of the Dodd-Frank legislation according to the discussion?

• It fails to engage with the shadow banking system.

• It does not address the traditional banking system.

• It provides too much advice to congressmen.

• It over-regulates the capital market system.

Why is there a need to develop a new intellectual framework for the modern capital market credit system?

• To increase the complexity of the system.

• To make the system more exclusive.

• To ensure the system is safe and beneficial for economic development.

• To eliminate the need for regulation.

What is the primary goal of the new framework for the capital market credit system?

• To make the system more complex.

• To ensure it works for people and economic development.

• To reduce the number of regulations.

• To focus solely on traditional banking.

What issue arises from the breakdown of securitization markets?

• A lack of interaction with traditional banking.

• An increase in deposit insurance costs.

• A misunderstanding of the interconnection between securitization banking and shadow markets.

• A decrease in capital market efficiency.

What is 'maturity transformation' as discussed in the video?

• A process to stabilize deposit insurance.

• Borrowing short-term and lending long-term.

• Lending short-term and borrowing long-term.

• A method to increase banking profits.