First, to what extent does the activity, as practiced by shadow banks, entail reliance on leverage or on maturity or liquidity transformation that could lead to a bank-like creditor run dynamic?
Bank regulation is primarily aimed at preventing the occurrence of such destabilizing runs or minimizing their ill effects, and so the need for bank-like regulation is greater in the presence of material run risk. Second, are banks still informally or indirectly at risk despite the migration to nonbank entities?