EC paper sheds light on dangers of shadow banking
The potential for shadow banking to damage the wider banking system and disrupt the macro-prudential aims of the ECB has been highlighted in the latest green paper from the European Commission
The shadow banking sector, which includes money market funds, exchange-traded funds and hedge funds, has doubled in size during the past decade and now controls assets in excess of £40 trillion ($63.6 trillion), according to estimates published in a European Commission green paper on March 19.
The sheer scale of the shadow banking sector has raised concerns it could become the next transmission mechanism for a new financial crisis after new rules and regulation are introduced to tighten
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