Paul Tucker’s ten commandments of shadow banking

Author: Gemma Varriale | Published: 30 Apr 2012

The deputy governor of the Bank of England, Paul Tucker, has set out ten recommendations aimed at moving the shadow banking debate towards a concrete policy agenda.

The proposals came at the EC’s shadow banking conference in Brussels on Friday, which followed the March 19 publication of the shadow banking consultation paper.

1. The first recommendation addressed shadow banking vehicles or funds that are sponsored or operated by banks. These entities, said Tucker, should be consolidated on to bank balance sheets.

Although noting that consolidation might require changes in accounting rules, which could take time, the Bank of England deputy governor said the vehicles and funds should be treated as consolidated in the application of Basel III regulatory capital requirements.

"If necessary, Pillar 2...