A guide to the rise of shadow banking

Author: | Published: 18 May 2014
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Shadow banking. Alternative credit providers. Direct lending. Call it what you will, funding by non-traditional lenders has increased as quickly as post-crisis reforms reined in banks’ ability to provide credit.

Lawmakers are well aware of the possibility of money – and risk – being pushed outside of what can now be called a keenly-overseen banking sector and into unregulated sectors. Their attempt to regulate non-bank systemically important financial institutions – or non-bank Sifis – is described by many as the last piece of the post-crisis regulatory puzzle.

IFLR is tracking this global regulatory quest, keen to see if it offsets the new credit being made available by these non-banks to fund much-needed growth.

The latest highlights of IFLR’s coverage on the topic is below

GLOBAL ISSUES

FSB delays asset manager G-Sifi designations The delay follows diverging consultation responses

Setting the rules for alternative credit Alternative credit providers are facing a laundry list of new restrictions to ensure they aren't the root of the next crisis. This three-part cover story looks at the key issues in the global shadow banking debate

Shadow banking: a regulator’s call to arms A senior Canadian securities regulator has called on global supervisors to ensure that market-based finance does not fall through the regulatory net

FSB reveals shadow banking policy options The chair of the securities lending and repo workstream of the FSB's shadow banking taskforce gave a real indication of what form the proposals will take

EUROPE

Alternative lenders: opportunity or threat? Banks have much to gain from the new breed of lenders gaining prominence across Europe

E-money firms: the next shadow banks? Hopes that alternative lenders would gain greater access to SMEs as a result of the UK small business bill have been dashed by recent developments concerning implementation

IMF's Michaela Erbenova: balancing regulation with economic growth Michaela Erbenova, the IMF's monetary and capital markets' financial supervision and regulation division head, spoke to IFLR about regulating alternative credit at a time when Europe needs to encourage growth

How EU private debt growth is changing leveraged lending European private debt funds' growing involvement in regional leveraged lending has prompted a commensurate rise in the use of US loans to finance EU acquisitions

VIDEO: BoE’s Haldane on how to regulate shadow banking In an exclusive interview, Andy Haldane discusses how to rehabilitate securitisation

How to grow a business when banks won’t lend Despite the retreat of traditional sources of credit, financing is available to those that are willing to innovate.

OPINION: Are the shadows really the banks? Barnabas Reynolds, head of Shearman & Sterling’s financial institutions advisory and financial regulatory group, assesses the regulatory response

Shadow banking: AMF MD reveals regulatory agenda Edouard Vieillefond, the managing director in charge of the regulatory policy and international affairs division of the French regulator, shared his thoughts with IFLR

Paul Tucker’s 10 commandments of shadow banking The deputy governor of the Bank of England has 10 recommendations aimed at moving the debate towards a concrete policy agenda

ASIA PACIFIC

Inside China: the AMC experiment The government has set up asset management companies to reduce risk in the country's banking system. But can they enhance value in distressed businesses?

Inside China: reining in P2P lending Regulators are struggling to rein in the growing internet finance businesses of non-licensed entities. It’s a trend that caught the attention of regulators when P2P operators started to go bankrupt

What to expect from a Chinese credit crisis The most visible component of the June 2013 credit crunch was the country’s shadow banking sector

Shadow banking risk jeopardises China mid-tier banks Although the entire financial sector is affected by the credit crunch in June 2013, mid-tier banks are now especially vulnerable

Australia’s shadow banking regulations revealed Local market participants are sceptical of the regulations that could follow, especially in a contracting sector

AMERICAS

Institutional investors eye P2P lenders A new study has found that an increasing number are looking to use peer-to-peer platforms

Why invest in LatAm’s unbanked The region's governments are easing regulations to give consumers and SMEs greater access to credit. It creates a prime opportunity for foreign investors

Leveraged lending partnerships raise market concerns Partnerships between banks and business development companies are helping to fill the funding gaps created by US Leveraged Lending Guidelines

The key US concerns Knight Capital’s quarterly loss of $389.9 million following its software error that nearly pushed it into bankruptcy has provided new ammunition for those that claim the shadow-banking sector threatens the stability of the US financial system

Shadow banking to dominate LatAm projects Toronto-based HudBay Minerals’ $1.5 billion Peruvian copper mine investment signals a major shift in global project finance