“The battle for the Democratic Party’s presidential nomination has raised the profile of the U.S. economy’s “shadow banking” sector. That’s the portion of the nation’s financial system that operates beyond the jurisdiction of government bank regulators.

“Back in the run-up to the 2008 financial meltdown, it was non-commercial banks like Bear Stearns and Lehman Brothers that cracked first, setting the stage for the greatest financial collapse since the Great Depression.”

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“For Dennis Kelleher of Better Markets, a Washington, D.C., nonprofit advocate for consumers, it’s a mistake to make a distinction between official banking and shadow banking.

“There is an inaccurate and artificial claim that the banking sector and shadow banking sectors are separate silos,” Kelleher said. “In reality, they’re interconnected and interrelated. Shadow banking could not exist without the financing and product creation from the banking sector.”

“We are still just halfway with the regulation necessary to actually make Dodd-Frank truly effective,” he said, “but nobody expected the furious counterattack from Wall Street.”

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Read the full CBS Money Watch article by Robert Hennelly here.