The huge difference here is leverage.
The typical bank in the US is levered ~5-12x which means, many of these "shadow banks" are unlevered, this creates an entirely different dynamic
The typical bank in the US is levered ~5-12x which means, many of these "shadow banks" are unlevered, this creates an entirely different dynamic
The "shadow banking" services that are rising are coming about because normal banks are unwilling to take on even moderately risky lending. Their demands for loans are now extremely stringent, especially for smaller and middle-tier business customers. This demand is thus being filled by different, non-traditional, sources, i.e. "shadow banking".
The situation in overseas, especially Europe, is very very different. Many large European banks are currently operating with reserve ratios of only a few %. I don't know if this means there is less "shadow banking" in europe or if they just have far too much sovereign debt on their books.
On https://fred.stlouisfed.org/graph/?g=o4OS I've included updated source data from that article, and you can see that M1 has continued to grow while fed reserve balances have fallen, but neither was ever close to M2 (which includes things like savings accounts and small CDs).
A better indication of banks' leverage is Total Equity to Total Assets, which is similar to the Basel Tier 1 capital ratio: https://fred.stlouisfed.org/series/EQTA
This has steadily gotten healthier over time overall as banks have tended to reduce their leverage over the last few decades.
If we are leveraged at 100% when we take the real valuation of assets into account, then, if we jack up the valuation on assets we hold, then we can chip away at the leverage ratio and get it to go down.