Much of this financing operated in a very similar way to bank loans, but just in another legal form and packaged differently. The products again http://www.rba.gov.au/speeches/2018/sp-gov-2018-05-23.html  15/20  5/25/2018  Australia's Deepening Economic Relationship with China: Opportunities and Risks | Speeches | RBA  offered a way of sidestepping some of the regulations and helped underpin the rapid growth of debt.
They offered banks an important new source of income to partly offset the decline in net interest margins that followed deposit and lending rate liberalisation. The smaller banks have played an important role in the growth of shadow financing. This is evident in the rapid growth of their claims on non-bank financial institutions (Graph 14).