Banks implicitly accept a social contract that gives them access to liquidity support in times of stress in return for regulation of their behaviour at all times. 3  Shadow banks included investment banks, mortgage brokers, finance companies, structured investment vehicles, hedge funds, and other private asset pools.
2  BIS Review 117/2010  incomplete, with banks retaining large quantities of supposedly risk-free leveraged super senior tranches of structured products. These exposures were compounded by the rapid expansion of banks into over-the-counter derivative products. In essence, banks wrote a series of large out-of-the-money options in markets such as those for credit default swaps.