Global Shadow Banking System Rises To $67 Trillion, Just Shy Of 100% Of Global GDP @ Zerohedge In case you assumed that 4 years after the onset of the present global financial crisis risks are at least gradually decreasing, please look again. The Financial Stability Board (FSB) in its latest report on the Shadow Banking System (SBS) has increased the global estimate for the size of the SBS by some $5 to 6 trillion in aggregate, bringing the 2011 estimate from $60 trillion with last year’s narrow coverage to $67 trillion, virtually the same as global GDP of $70 trillion at the end of 2011.
The Three “Financial Structure” Paradigms Of Modern Finance @ Zerohedge Please note how the second, “massive shadow banking system financing”, and third, “Central Bank finance based system”, paradigms are gradually displacing the traditional first paradigm, “conventional banking deposits as the main financing source”. As Zerohedge remarks…”the coordinated central bank cartel becomes the one and only source of money. And not just any money, but the definition of ‘Gresham Law’ money, as creeping central planning and ubiquitous monetization, means very soon only central banks will be the source of any incremental leverage, while all ‘good credit’ is slowly but surely driven out of the system”….”It is this third paradigm that is the preamble to the final collapse, because just before the endgame, it will be every central bank against everyone else, and against itself, whereby the only way to get ahead is to destroy your own currency of exchange as fast as possible, at first on a relative basis, by devaluing against all other currencies in a closed loop, then on an absolute, by devaluing against hard assets.”