Shadow Banking: what kind of Macroprudential Regulation Framework?

13-09-2021 - 11:07 ECON
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Shadow Banking: what kind of Macroprudential Regulation Framework? © Image used under the license from Adobe Stock

Shadow banking is a part of the financial sector where regulatory standards are looser than for regular banks. This means more diversity and resilience but also greater risk. The study requested by ECON committee identifies the components of the shadow banking system and analyses both the advantages, e.g. enhanced support to the real economy, but also concerns that shadow banking can lead to systemic risks. It makes five horizontal recommendations for better macroprudential regulation.