What are shadow banks, and which of the following statements best describes their role and characteristics within the financial system?

Group of answer choices

Shadow banks refer to small$-$scale, informal community banks that operate in rural and underserved areas, providing microloans and financial services where traditional banking is inaccessible.

Shadow banks consist of non$-$bank financial intermediaries that provide services similar to traditional banks, such as lending and borrowing, but operate under less regulatory scrutiny and without access to central bank funds.

Shadow banks are government$-$created entities designed to operate in financial markets as undercover regulators to oversee and manage risks associated with unregulated financial activities.

Shadow banks are financial entities that operate without any regulatory oversight, primarily dealing in illicit financial transactions and money laundering operations across borders.