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.[1] 

In a keynote address before the Systemic Risk and Organization of the Financial System Conference in California on May 12, 2017 FDIC Vice Chairman Tom Hoenig announced his novel market-based proposal to strengthen the financial system and provide regulatory relief and foster long-term economic growth.  According to Hoenig, even after the financial crisis, "the U.S. financial system remains heavily subsidized, increasingly concentrated, and, despite a host of new efforts to safeguard the system, it continues to be vulnerable to inevitable financial shocks.” Mr. Hoenig has long been a proponent of a new organizational model that would turn the industry back toward capitalism. The Vice Chairman’s proposal is a plan whose goal is to "ensure that the public safety net is not expanded beyond the traditional banking activities that it was originally designed to support and to restore open market competition within the financial services industry.”

In a May 9th Address, Michael Held, Executive Vice President and General Counsel of the Federal Reserve Bank of New York, gave his thoughts on the new compliance landscape. Held told his audience at SIFMA’s Compliance and Legal Society Monthly Luncheon that in recent years the role of compliance within supervised financial institutions has grown dramatically in size, scope, and relevance. He also said that since the financial crisis, risk and compliance functions have grown in respect and stature across the financial services industry. Despite this new stature, however, those charged with monitoring compliance at financial institutions face an environment that has become perhaps “too rules-based.” Held offered his thoughts on firms and compliance personnel can meet these new challenges.