Shadow banking system reshapes money creation, central banking policies worldwide.
The Federal Reserve has changed its policies to let shadow banks access its reserves after the financial crisis. This helps understand how credit claims turn into money. Before, the Fed couldn't control the crisis because shadow banks weren't included in the system. New security structures were made to give shadow banks liquidity. These structures show different types of money: central bank money, quasi-money, and shadow money. This shows how money is created and how important shadow banks are in the financial system.