Economic

The economy came to use shadow banking more and more because

a.modern electronic funds transfers were allowed (via ApplePay, Venmo, BitCoin etc) but not archaic paper check writing

b. they had deposit insurance and regulatory oversight like traditional banks, but with higher yields paid to investors than bank accounts.

c. they were much safer than traditional banks who might still face old fashioned bank runs

d. the financial products they offered were similar to bank accounts, but with higher yields paid to investors than bank account