How to explain shadow banking and shadow banking system in a popular way?

So far, China regulators have not given a widely accepted formal definition of shadow banking. Personally, I prefer the following definitions: Ba Shusong (20 12) defines shadow banking as four calibers from narrow to wide:

1. narrowest caliber = bank wealth management business+trust company.

2. Narrow caliber = narrowest caliber+finance company+auto finance company+finance leasing company+consumer finance company and other non-bank financial institutions.

3. Wide caliber = narrow caliber+interbank business+off-balance-sheet business such as entrusted loans+financing guarantee companies+non-bank financial institutions such as microfinance companies and pawn shops.

Broadest caliber = wider caliber+private lending or tend to be divided into the following four categories:

First, non-bank financial institutions, such as trust and investment companies, financial leasing companies, microfinance companies, etc.;

Second, the arbitrage activities of traditional banks (including some off-balance-sheet businesses), such as entrusted loans, securitization, derivatives and so on;

Third, secret financial activities;

Fourth, other financial innovations, such as private lending and investment banking. It is worth noting that the shadow banking system at home and abroad is very different, so it cannot be simply referred to as "shadow banking".

In essence, this is the consignment money fund. So is the money fund completely risk-free? Is it the killer of bank deposits? Why have interest rates been marketized for so many years, and in a market with abundant money funds, some people still keep money in the bank? Are there any other factors besides the liquidity requirements in personal finance? In other words, is the money fund completely risk-free? Let's take a look today. First of all, shadow banking exists outside the regulatory system. Supervision will bind the hands and feet of banks, but it will supervise from the perspective of economic stability and social stability, and will also provide guarantees when abnormal situations occur to ensure that comprehensive and large-scale problems will not occur because of individual problems.