burgeoned in the run up to the global financial crisis was one of the major causes of the global turmoil and quite understandably, the regulators are revamping its regulation to ensure financial stability. before i dwell further on the regulatory developments, let me touch upon some underpinnings to the conceptual framework. what is shadow banking? the term “ shadow banking system ” was first used in 2007, and gained popularity during and after the recent financial crisis, as it highlighted the bank - like functions performed by entities outside the regular banking system. the more comprehensive definition, as adopted by the financial stability board ( fsb ), i. e., “ credit intermediation involving entities and activities ( fully or partially ) outside the regular banking system ” has been globally accepted. this definition has two important components : first, non bank financial entities or entities outside the banking system that engage in the “ bank like ” activities of maturity transformation, undertaking credit risk transfer and using direct or indirect financial leverage. second, activities such as securitization, securities lending and repo transactions that act as important sources of funding for non bank entities. thus, shadow banks comprise entities which conduct financial intermediation directly, such as finance companies or nbfcs, and entities which provide finance to such entities, such as mutual funds. globally, shadow banking entities could be covered under the broad heads of ( i ) money market funds, ( ii ) credit investment funds, hedge funds, etc, ( iii ) finance companies accepting deposits or deposit bis central bankers ’ speeches like funding, ( iv ) securities brokers dependent on wholesale funding, ( v ) credit insurers, financial guarantee providers and ( vi ) securitisation vehicles. such nonbank intermediation, when appropriately conducted, provides a valuable alternative to bank funding and supports real economic activity. but experience from the crisis demonstrates the capacity of some non - bank entities and transactions to operate on a significantly large scale, in ways that create bank - like risks to financial stability ( longer - term credit extension based on short - term funding and leverage ). such risk creation may take place at an entity level but it can also form part of a complex chain of transactions, in which leverage and maturity transformation occur in stages, creating multiple forms of feedback into the regulated banking system. like banks, a leveraged and maturity - transforming shadow banking system can also be vulnerable to " runs " and generate contagion, thereby amplifying systemic risk. shadow

assign credibility to the results and inferences. these materials represent good grounds for discussing issues of great importance to the albanian economy. in contrast, today the bulk of economic discussions and analyses in albania are based on a different criterion : that of listening and discussing. analysts and economists focus mainly on the transmission of conclusions of their economic thought. they neglect the important discussion of data sources, the identification of theory references ( by author or by year ), or the assumptions made while applying the models on whose bases the results are obtained. this working model of “ speak and listen ” has dominated the economic analysis outside institutions. this model lacks two essential elements, the “ read and write ” ones. economic comeback focuses only on television media, while all the economic policies of the bank of albania are based on the analysis and research papers with theoretical and empirical character and on economic indicators database. all these elements of decision - making are transparent to the public because they are published in electronic formats on the bank of albania ’ s website, and are simultaneously available in printed forms as separate working papers or summarized in volume forms. all this information is free of charge and is made available to the public as a public good. consequently, analysis and comments on the nature, direction and speed of economic policies should start from, and address to these studies in order to discuss them. it is true that any analysis and critique starts from an economic hypothesis, but before the discussion becomes public, it is necessary that the validity of the null hypothesis is tested. this process should be documented in a working paper or article, because if the hypothesis or the model or data used are not appropriate in the analysis in question, then the conclusions are partial in the best case or make no sense in the worst case. honestly, i hope that today ’ s activity would help in establishing a model or a culture of debate or analysis from the perspective of a third party. everyone can benefit from the discussion, which is a necessary good for any institution that designs and implements policies of economic, environmental, social or any other nature. and this happens only when the content and the form of discussion is not determined by individual definition of the phenomenon, but by its detailed theoretical and empirical explication as required by the economic science standards.