If you asked a few months ago where the next financial crisis might emanate from, most people probably wouldn’t have said regional banking. Rather, they might have guessed at the shadow banking sector, which has grown dramatically since the global financial crisis of 2008. It remains far less regulated than the traditional banking sector.
When the pandemic hit, non-banks such as hedge funds and open-ended money market funds pulled out of key credit markets, forcing governments to intervene to stabilise things.
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Financial Times
Rana Foroohar is a global business columnist and an associate editor at the Financial Times, based in New York. She is also CNN’s global economic analyst.
