My only question is: will the regulators use transparency to shine light on shadow banking? Specifically, for structured finance securities ranging from covered bonds to securitizations, will the regulators require that these securities provide observable event based reporting so all activities like a payment or delinquency involving the underlying collateral are reported before the beginning of the next business day?
Global regulators set a September 2013 deadline to present tougher rules for money-market mutual funds, repurchase agreements and other so-called shadow banking activities as part of a broader push to reduce risk in the financial system.
The Financial Stability Board also said that it would issue draft rules next year targeted at non-bank institutions whose failure would roil the global economy.
“Vigilant oversight of shadow banking activities will be required to respond to inevitable market mutations,” the FSB said in an e-mailed report. “The approach is designed to be proportionate to financial stability risks.”...
The Basel-based FSB has estimated that global shadow-banking activities were worth about $60 trillion in 2010, as much as 30 percent of the total financial system.
Supervisors class shadow banking activities as those that allow banks to carry out business off balance sheet, as well as those which allow investors to bypass lenders and the functions they traditionally fulfill on the markets.
Institutions identified by regulators as shadow banks also include some exchange traded funds, securitization structures, and monoline insurers, which specialize in products that apply to financial investments....
“There are a range of tools in the policy toolkit that could ensure the shadow banking system is taken out of the shadows,” Carney said.But will transparency be one of these tools?
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