Global shadow banking sector surges to $45-trillion
Data from China and Luxembourg were included by the Financial Stability Board for the first time
Zurich — The global nonbank or "shadow" financial sector was estimated to be worth about $45.2-trillion at the end of 2016, in a sharp rise from a year earlier, financial regulators said Monday. In a report, the Financial Stability Board (FSB) said shadow banking activities across 29 jurisdictions, which together represent more than 80% of global GDP, grew 7.6% in 2016. The sector includes hedge funds and finance companies or securities entities that provide credit or credit guarantees without being regulated like a bank. The international regulatory body said the growth in the sector in 2016 was largely driven by collective investment vehicles, such as credit hedge funds and money market funds. This segment swelled by 11% during the year to an estimated value of $32.3-trillion, FSB said. Following the 2008 financial crisis, when the collapse of international banks threatened to bring down entire economies, the size and systemic risk of the little-regulated shadow sector also came ...
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