EU still unsure what ‘shadow banking’ really is

An increasing area of non-bank credit activity, or shadow banking, has not been the prime focus of prudential regulation and supervision. Shadow banking performs important functions in the financial system. For example, it creates additional sources of funding and offers investors alternatives to bank deposits. But it can also pose potential threats to long-term financial stability.

The purpose of the European Commission Green Paper issued on the 19 March 2012 was to take stock of current development, and to present on-going reflections on the subject to allow for a wide-ranging consultation of stakeholders.

• Primary Source

Website: Institutional Money Market Funds Association (IMMFA) http://www.immfa.org/

Wikipedia: Shadow banking system http://en.wikipedia.org/wiki/Shadow_banking_system

European Commission: RAPID: Press Release: IP/12/253: Taking action on shadow banking: avoiding new sources of risk in the financial sector http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/253&format=PDF&aged=0&language=EN&guiLanguage=en

European Commission; DG Internal Market and Services: Banking: Shadow banking http://ec.europa.eu/internal_market/bank/shadow_banking/index_en.htm

EurActiv, 20.3.12: Commission tries to shed light on 'shadow banking' http://www.euractiv.com/euro-finance/eu-bring-banking-shadows-news-511585

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