Arab Today, arab today global shadow banking hits 67 trillion
Last Updated : GMT 23:03:36
Arab Today, arab today
Arab Today, arab today

Global shadow banking hits $67 trillion

Arab Today, arab today

Arab Today, arab today Global shadow banking hits $67 trillion

Washington - Arabstoday

The system of so-called \"shadow banking,\" blamed by some for aggravating the global 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 shadow banking is set to thrive, beyond the reach of a regulatory net tightening around traditional banks and banking activities. The FSB, a task force from the world\'s top 20 economies, also called for greater regulatory control of shadow banking. \"The FSB is of the view that the authorities\' approach to shadow banking has to be a targeted one,\" the group wrote in a report, noting the current lax regulation of the sector. \"The objective is to ensure that shadow banking is subject to appropriate oversight and regulation to address bank-like risks to financial stability,\" it said. Officials at the European Commission in Brussels also see closer oversight of the sector as important in preventing a repeat of the financial crisis that has toppled banks over the past five years and rocked the euro zone. The study by the FSB said shadow banking around the world more than doubled to $62 trillion in the five years to 2007 before the crisis struck. But the size of the total system had grown to $67 trillion in 2011 - more than the total economic output of all the countries in the study. The multitrillion-dollar activities of hedge funds and private equity companies are often cited as examples of shadow banking. But the term also covers investment funds, money market funds and even cash-rich firms that lend government bonds to banks, which in turn use them as security when taking credit from the European Central Bank. Even the man credited with coining the term, former investment executive Paul McCulley, gave a catch-all definition, saying he understood shadow banking to mean \"the whole alphabet soup of levered up non-bank investment conduits, vehicles and structures,\" such as the special investment vehicles that many blamed for the financial crisis. The United States had the largest shadow banking system, said the FSB, with assets of $23 trillion in 2011, followed by the euro area - with $22 trillion - and the United Kingdom - at $9 trillion. The U.S. share of the global shadow banking system has declined in recent years, the FSB said, while the shares of the United Kingdom and the euro area have increased. The FSB warned that tighter rules that force banks to hoard more capital reserves to cover losses could bolster shadow banking. It advocated better controls, although cautions that shadow banking reforms should be dealt with carefully because the sector can also be a source of credit for business and consumers. Forms of shadow banking can include securitization, which can transform bank loans into a tradeable instrument that can then be used to refinance credit, making it easier to lend. In the run-up to the crisis, however, banks such as Germany\'s IKB stored billions of euros of such instruments in off-balance sheet vehicles, which later unraveled. Another example is a repurchasing agreement, or repo, where a player such as a hedge fund could sell government bonds it owns to a bank, agreeing to repurchase them later. The bank may then lend those bonds onto another hedge fund, taking a position on the government debt. Such agreements are used by banks to lend and borrow. A risk could arise if one of the parties in the chain collapses. The European Commission is expected to propose EU-wide rules for shadow banking next year.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today global shadow banking hits 67 trillion Arab Today, arab today global shadow banking hits 67 trillion

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today global shadow banking hits 67 trillion Arab Today, arab today global shadow banking hits 67 trillion

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today Taxi! Transport gets an overhaul

GMT 12:09 2017 Sunday ,24 September

Taxi! Transport gets an overhaul
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Turkey warns of 'security' steps

GMT 12:17 2017 Sunday ,24 September

Turkey warns of 'security' steps
Arab Today, arab today North Korea 'more opaque'

GMT 10:50 2017 Sunday ,24 September

North Korea 'more opaque'
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Ministry seeks to improve education

GMT 14:49 2017 Sunday ,17 September

Ministry seeks to improve education
Arab Today, arab today 'Lady Beast' fights for girl gamers

GMT 10:27 2017 Sunday ,24 September

'Lady Beast' fights for girl gamers
Arab Today, arab today Psychologists help Mexico deal

GMT 05:05 2017 Sunday ,24 September

Psychologists help Mexico deal
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Third generation adds more power

GMT 13:40 2017 Sunday ,24 September

Third generation adds more power
Arab Today, arab today Carmakers face billions in European

GMT 12:37 2017 Saturday ,23 September

Carmakers face billions in European
Arab Today, arab today Lebleba is preoccupied in filming 'Back Street'

GMT 08:56 2017 Thursday ,21 September

Lebleba is preoccupied in filming 'Back Street'
Arab Today, arab today Big Western brands polluting oceans

GMT 20:10 2017 Saturday ,23 September

Big Western brands polluting oceans

GMT 08:59 2017 Wednesday ,20 September

Youssra prepares for launching her program

GMT 10:16 2017 Friday ,22 September

All eyes on May as she prepares

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 12:01 2017 Wednesday ,20 September

Puerto Rico, Virgin Islands brace

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 18:11 2017 Saturday ,23 September

Doctor provides advices to families

GMT 13:36 2017 Saturday ,23 September

unveils Joon - the 'millenials' airline

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 12:46 2017 Thursday ,21 September

Google likely to buy stake in Taiwan smartphone maker HTC

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday