Shadow banking is not really a 100% trading subject but still, given the size of the sector, the financial services sector can probably not do without it. The market is enormous: 75 trillion USD. That is 75,000,000,000,000 USD.
The CFA Institute Magazine recently published an article that touches upon some of the risks that shadow banking brings but at the same time clearly states some of the benefits. Point is that the recent hyperinflation of rules made banks more reluctant to do their basic task: extend credit. The result is that people looking for credit turn to non-credit financial institutions like asset managers and insurers. Client protection, investor expectations and regulatory requirements with these companies are not the same as for banks. As such a new problem is born for regulators: how to regulate this without killing it?