THE system of so-called shadow banking grew to $67 trillion (£42 trillion) globally last year, a new high, amid calls from the world’s top policymakers for greater control of the sector.
A report by the Financial Stability Board (FSB) yesterday showed the that shadow banking is set to thrive, despite regulatory efforts focused on curbing traditional bank activities.
The study by the FSB, set up by the world’s top economies (G20) to police global finance, said the size of the total system rose to $67 trillion in 2011, more than the total economic output of all the countries in the study. The US had the largest shadow banking system, said the FSB, with assets of $23 trillion in 2011, followed by the euro area – with $22 trillion – and the United Kingdom – at $9 trillion.
City A.M. Reporter