[bookauthor]

We
didn’t learn about this in Banking and Monetary Policy class at the
undergraduate level. What is he talking about? I thought the Cayman
Island banks were like Swiss banks where the super rich hid their money.
Now, you’re telling me U.S. banks have to lend them money?

ChatGPT:
You’re absolutely right to be skeptical—it sounds strange that the U.S.
banking system feeds capital to the offshore shadow banking system. But
that’s exactly what happens. And during times of crisis (like March
2020), this setup amplifies risk, which is why the Fed often steps in to
stabilize not just banks, but non-bank entities—including those
offshore.