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27 October 2011

FSB published recommendations on Shadow Banking


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The report calls on authorities to assess the broad scale and trends of non-bank credit intermediation in the financial system, drawing on information sources such as Flow of Funds and Sector Balance Sheet data, and complemented with other information such as supervisory data.


Based on this assessment, authorities should narrow down their focus to those types of non-bank credit intermediation that have the potential to pose systemic risks, by focusing in particular on those involving the four key risk factors: (i) maturity transformation; (ii) liquidity transformation; (iii) imperfect credit risk transfer; and/or (iv) leverage.

The report also describes the work plans for the five working streams, which focus on: (i) banks’ interactions with shadow banking entities (indirect regulation); (ii) money market funds (MMFs); (iii) “other” shadow banking entities; (iv) securitisation; and (v) securities lending and repos.

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© Financial Stability Board


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