II. The effect of Shadow Banking from the Traditional Banks’ power to Expand Credit How can this securitization impact the credit business and expansion period? The very first effectation of securitization would be to move the credit threat of the loans through the banking institutions’ balance sheets towards the investors through asset-backed securities (Gertchev, 2009). This ‘regulatory arbitrage’ enables institutions to circumvent book and money adequacy demands and, consequently, to boost their credit expansion. Simply because banking institutions need certainly…