Financial Stability Board: background note on shadow banking
April 12, 2010
The Financial Stability Board ("FSB") has published a note entitled Shadow Banking. The FSB formed a task force to develop initial recommendations to strengthen the oversight and regulation of the shadow banking system.
The note proposes that monitoring and policy responses should be guided by a two-stage approach: firstly, by casting the net wide to cover all non-bank credit intermediation so as to identify potential areas where new risks might arise; and secondly, by narrowing the focus to those parts of the system where maturity/liquidity transformation, flawed credit risk transfer, and/or leverage create important systemic risks.
The FSB solicits feedback from the public on this note. Comments on the note should be submitted to the FSB by 16 May 2011 by e-mail ([email protected]) or post (Secretariat of the Financial Stability Board, c/o Bank for International Settlements, CH-4002, Basel, Switzerland).