TOT Question 17 2.46 pts The President and CEO of the Federal Reserve Bank of New York in June, 2008 described a non-bank, "parallel" banking system that he appeared to indicate had a combined asset size of over $6 trillion in 2007, compared to the $10 trillion in total assets of the entire U.S. Commercial banking system. He described one problem with this "parallel" system as the essential concept of a privately-held financing and investment firm which is created to be unregulated by the government WA regulators (i.e., the Fed, the FDIC, the SEC, state insurance regulatory commissions) and which is not consolidated into the financial results of the banks that play a role in creating them, is inconsistent with a stable system. 1 the existence of unregulated private equity firms and hedge funds, which created "Ponzi"-like investment structures that, instead of committing fraud against individuals, committed fraud against commercial banks. the financing and investment vehicles in this non-bank system were essentially financing a large amount of long-term, high- risk loans with a substantial amount of very short-term financing instruments which must be refinanced often and were supported by credit commitments from commercial banks. O the growth and development of the so-called financial service conglomerates, wherein a bank holding company owns the stock of a number of different kind of financial organizations such as commercial banks, investment banks, investment companies, investment brokers and dealers, mortgage financing entities, and insurance companies. 2.46 pts