SHADOW BANKING: REASONS OF EMERGENCE AND DIRECTIONS OF DEVELOPMENT

Shadow banking is a relatively new, quickly spreading financial phenomenon, which can be observed in both developed and developing countries. Its essence consists in the transformation in the course of securitization of loans granted to commercial banks and held on their balance sheets into financial assets (bonds) and their subsequent realization in the financial market. As a result of securitization, the Basel Committee standard of capital/assets activity decreases, and commercial banks gain the opportunity to increase the lending volumes. Experts point to a decrease in the level of the shadow sector customers' safety, its unpredictable and destructive impact on the monetary policy of leading countries, the growth of the number of ineffective mergers and acquisitions, a reduction in taxes wired to the budget. Shadow banking institutions bear a systematic risk that adversely affects the state of the entire system of financialmarkets or its individual key segments. Efforts taken by national and international organizations during the past few years to impose tougher regulatory requirements on the operation of shadow institutions aim to substantially improve the business climate in this area. The purpose of the paper is to conduct a comprehensive research of the peculiarities related to shadow banking, reveal reasons behind the emergence of shadow banking and assess consequences of shadow banking for the performance of the financial system.