3 ms·
that makes FTX a "shadow bank", not merely an exchange.
by swyx 4y ago
that makes FTX a "shadow bank", not merely an exchange.
- ironick09 4y agoIt makes them a brokerage, doesn’t it? Not a shadow bank.
- sytelus 4y agoIt's worse than "shadow bank". It's bank who is allowed to print money at its whims and create any arbitrary leverage it wants.
- eru 4y agoWell, that's what the 'shadow' in 'shadow bank' means: less/different regulation than a normal bank. That's not necessarily a bad thing, btw.
- refulgentis 4y agoWhere's the "bank" in this "shadow bank"? You're describing a casino with a money printer.
- eru 4y ago"Shadow banks" aren't necessarily "banks". See https://en.wikipedia.org/wiki/Shadow_banking_system https://en.wikipedia.org/wiki/Shadow_banking_system > The shadow banking system is a term for the collection of non-bank financial intermediaries (NBFIs) that provide services similar to traditional commercial banks but outside normal banking regulations.[1] Examples of NBFIs include insurance firms, pawn shops, cashier's check issuers, check cashing locations, payday lending, currency exchanges, and microloan organizations.[2][3] The phrase "shadow banking" is regarded by some as pejorative, and the term "market-based finance" has been proposed as an alternative.[4]
- lupire 4y agoWhat would you say a non shadow bank is? "Money printing" is "just" a reserve ratio near or less than 0.