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Sun Nov 18, 2012, 05:41 PM

Shadow Banking Grows to $67 Trillion Industry, Regulators Say

The shadow banking industry has grown to about $67 trillion, $6 trillion bigger than previously thought, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight.

The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off- balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the Financial Stability Board said in a report, which utilized more data than last year’s probe into the sector.

“Appropriate monitoring and regulatory frameworks for the shadow banking system needs to be in place to mitigate the build-up of risks,” the FSB said in the report published on its website.

While watchdogs have reined in excessive risk-taking by banks in the wake of the collapse of Lehman Brothers Holdings Inc. in 2008, they are concerned that lenders might use shadow banking to evade the clampdown. Michel Barnier, the European Union’s financial services chief, is planning to target money market funds in a first wave of rules for shadow banks next year.

The FSB, a global financial policy group comprised of regulators and central bankers, found that shadow banking grew by $41 trillion between 2002 and 2011. The share of activity based in the U.S. has declined from 44 percent in 2005 to 35 percent in 2011, moving to the U.K. and the rest of Europe.

http://www.bloomberg.com/news/2012-11-18/shadow-banking-grows-to-67-trillion-industry-regulators-say.html

6 replies, 730 views

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Reply Shadow Banking Grows to $67 Trillion Industry, Regulators Say (Original post)
FarCenter Nov 2012 OP
Ruby the Liberal Nov 2012 #1
FarCenter Nov 2012 #2
DaniDubois Nov 2012 #3
bluerum Nov 2012 #4
Octafish Nov 2012 #5
flamingdem Nov 2012 #6

Response to FarCenter (Original post)

Sun Nov 18, 2012, 05:42 PM

1. Crimeny

Hate to think what the private derivatives market is up to now. What comes after a Trillion?

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Response to Ruby the Liberal (Reply #1)

Sun Nov 18, 2012, 05:48 PM

2. Quadrillion -- non-bank financial institutions are roughly as big as banks, and a lot less regulated

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Response to FarCenter (Original post)

Sun Nov 18, 2012, 06:06 PM

3. This is really bad. We all see it but with us being such a divided country

 

nothing ever gets done about it. We're to busy pointing fingers and calling names at the "other" party that we fail to bring the real issues to the table. Both parties are doing this.

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Response to FarCenter (Original post)

Sun Nov 18, 2012, 06:09 PM

4. Christmas almighty. Taxing this at 10% would help erase the deficit -

as long as we don't hand it over to the militery.

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Response to FarCenter (Original post)

Sun Nov 18, 2012, 06:13 PM

5. Trickle Down at work.

Backed by the US taxpayer, courtesy of the BFEE.

http://journals.democraticunderground.com/Octafish/157

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Response to FarCenter (Original post)

Sun Nov 18, 2012, 07:26 PM

6. hmm. How do I get in on that? Can I pretend to be a shadow banker

and get a job or something?

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