Sun Nov 18, 2012, 05:41 PM
FarCenter (17,316 posts)
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.
6 replies, 808 views
Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Shadow Banking Grows to $67 Trillion Industry, Regulators Say (Original post)
|Ruby the Liberal||Nov 2012||#1|
Response to FarCenter (Original post)
Sun Nov 18, 2012, 06:06 PM
DaniDubois (154 posts)
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.