Sunday, June 4, 2017
The Financial Stability Board’s (FSB) sixth annual shadow banking survey found that the shadow banking market remains robust and growing, equivalent to 13 percent of total financial system assets and 70 percent of the GDP of 28 covered jurisdictions. The report published May 10, 2017 presents the results of the FSB’s annual monitoring exercise to assess global trends and risks in the shadow banking system, reflecting data up to the end of 2015. It covers 28 jurisdictions, adding Belgium and the Cayman Islands for the first time. Notably, however, China failed to provide data for this latest report.
Among the findings from the 2016 exercise are:
The 2016 survey also included new data to measure interconnectedness among the bank and the non-bank financial sectors and to assess the trends of short-term wholesale funding, including repurchase agreements (repos). The FSB noted that, despite its new initiatives to improve data collection, data availability in this area still needs to be improved. Working with the data they were able to collect, the report's authors found that "on an aggregated basis, both banks’ credit exposures to and funding from OFIs have continued to decline in 2015, although they remain above the levels before the 2007-09 financial crisis.”
Based on the data and conclusions from this study, the FSB said it will report to the G-20 in time for its July summit on whether further regulation of the shadow banking sector is needed to ensure financial stability.
The full text of the FSB’s Global Shadow Banking Monitoring Report 2016 is available via: http://www.fsb.org/wp-content/uploads/20170509-GSBMR-press-release.pdf
 According to Reuters, "China's $7.7 trillion shadow banking sector, which includes non-bank forms of credit such as trusts and wealth management products, is dwarfed by that of the United States and Europe, but the speed at which it has expanded has become a concern to regulators at home and abroad worried about hidden systemic risk.” http://www.reuters.com/article/us-g20-shadowbanks-fsb-china-idUSKBN18618F