The risks of shadow banking’s growth

Author: Gemma Varriale | Published: 13 Sep 2011

With the regulatory spotlight fixed on banks and their activities, the shadow banking industry is growing.

According to Stuart Willey at White & Case in London, the provision of credit within the financial system may shift away from the banking organisations because of the controls that are imposed upon them.

It’s already happening in Asia: The Financial Times reported recently that the management team of Azentus, one of Hong Kong’s new hedge funds, all came from Goldman Sachs.

As it gets more costly for banks to do business, the lightly regulated shadow banking sector has seized the opportunity to lend directly...