"The U.S. shadow banking sector is alive and well, growing at a fast pace and remains opaque," MarketWatch's Greg Robb writes, citing top economists at the University of Chicago, Harvard and the Fed.
Why it matters: The sector might not cause the next downturn, but Dallas Fed president Robert Kaplan says he's worried it could be “an accelerant” to a recession that does come.
What's happening: "The shadow banking sector, now called by the more polite term 'private debt market’ has roughly tripled in size over the past few years and one estimate puts the size around $1.2 trillion," Robb writes from the American Economics Association conference in San Diego.
One big risk of the shadow banking sector is that investors can demand their money at any time. That could lead to a run on their assets, according to Jeremy Stein, a former Federal Reserve governor and a finance expert at Harvard.
