One interpretation of the ‘sudden’ visibility of the shadow banking system in 2007 is to call this a case of ‘myopia’: it must have been myopia indeed if the emergence of a system remained unnoticed that, according to recent estimations, is said to hold US$50 trillion on assets, 27% of all financial assets in major industrialised countries. No surprise that the implosion of this sector brought the global economic system on the brink of collapse. Another interpretation is to see the debate on shadow banking as a new attempt to extend a certain regulatory rationality onto this new field. From this perspective, these documents seek to provide blue prints for a specific approach to regulate the shadow banking system. They are driven by the quest for certainty, the quest to provide technical fixes to functional problems arising from shadow banking.
To unfold this argument, this contribution is structured in three sections. The first section provides a reconstruction of the current debate on the emergence of shadow banking. This reconstruction highlights how the debate fosters a particular reading of shadow banking as a market based system. The second section shows how this reading and the regulatory consequences it identifies are based upon three utopian projects of the spatial, temporal and actor-based constitution of shadow banking. These utopias have the consequence that every crisis in the future can be grasped as a failure of insufficient manifestation, accompanied by the call for moving closer to that utopian ideal. The third section explores how financialisation sheds a different light on shadow banking beyond the search for a technical fixes. In this contribution we explore some regulatory consequences of this alternative description.
