'Shadow Banking' Sector Halved Since Pre-Crisis: Report

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Enrico Perotti, 21 June 2012The ‘shadow banking’ sector is a loose title given to the financial sector that exists outside the regulatory perimeter. This column argues that despite its unpleasant sounding name, and its crucial role in the credit boom that preceded the global crisis, it does have its benefits – something that the regulators should be aware of.Full Article: The roots of shadow banking

By Christos N. Spanos:Just as the European banking sector is scrambling to recapitalize, an old familiar foe is rearing its ugly head again, bringing back memories of the not too distant past. The anaemic lending appetite by banks is once again creating a setting ripe for shadow banking to re-emerge. Most will argue that it never went away, it just became smaller and stealthier.

Last week, the China Banking Regulatory Commission (CBRC) announced a crackdown on wealth management products (WMPs).

BRUSSELS/WASHINGTON (Reuters) - The shadow banking system - blamed for aggravating the financial crisis - grew to a new high of $67 trillion globally last year, a top regulatory group said, calling for tighter control of the sector. A report by the Financial Stability Board (FSB) on Sunday appeared to confirm fears among policymakers that the so-called shadow banking system of non-bank intermediaries continues to harbour risks to the financial system. ...

BRUSSELS (Reuters) - The European Commission pledged to tighten control of so-called shadow banking on Friday, answering central bank calls for stricter regulation of the sprawling 46 trillion euro ($61 trillion) sector which has been blamed for aggravating the financial crisis. Policymakers fear that as the regulatory net closes on banks, shadow banking will thrive, with activities traditionally carried out by banks escaping the watch of regulators. ...

BRUSSELS (Reuters) - The European Commission is widening its regulatory sweep to include "shadow" banking, heralding new controls over the sprawling and largely unchartered 46 trillion euro ($61 trillion) sector blamed for helping trigger the financial crisis. The EU's executive launched a consultation with industry on Monday with a view to writing rules to control shadow banking, a term describing activity resembling banks' basic borrow-and-lend model, but often taking place beyond the watch of regulators. ...