Why is the shadow banking system an important part of the? 2007-2009 financial? crisis? A. The shadow banking system was able to take on significantly less risk than other financial? firms, preventing the economy from losses. B. An increase of funding from the shadow banking system resulted in a decrease in the issuance of? CDOs, increasing the severity of adverse selection and moral hazard problems. C. A decrease of funding from the shadow banking system caused a restriction of lending and a decline in economic activity. D. A large amount of funds flowed through the shadow banking? system, which increased interest rates and fueled some of the housing bubble.