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How does shadow banking differ from commercial banking 1 While commercial...

This question belongs to Commerce Banking And Financial Institutions
Banking and Financial Institutions
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How does shadow banking differ from commercial banking?
1. While commercial banks are tightly regulated, shadow banking is not well regulated.
2. Shadow banking cannot create money.
3. While liabilities of commercial banks are insured, shadow banking liabilities are not insured.
4. While commercial banks access to central bank liquidity in the times of distress, shadow banking does not have such resource.
Select the correct answer:

Answer & Solution
Correct Answer: Option D
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