Comments from a speech made yesterday by Bank of Finland Governor and ECB governing council member Erkki Liikanen
- there is a risk that tighter banking regulation in the aftermath of the global financial crisis could lead to growth in unregulated shadow banking.
Such proactive measures as applying systemically-important financial institution definition and extending that regulation and supervision also to the shadow banking sector could be taken if necessary
Financial regulators are seeking to highlight the so-called “shadow banking” sector, a EUR 24 trln industry in Europe – half the world’s total – that comprises money market funds, hedge funds and firms involved in securities lending and repurchases.
Reuters has more here
