FSB chief in call to rein in ‘shadow banking’

“Shadow banking” must be dragged into the harsh light of day and both it and global banks must be forced to serve the real economy, one of the world’s top regulators has warned.

These market-based sources of credit, which include corporate bond sales and direct lending by hedge funds, are now half the size of the traditional banking sector and growing still, even as many banks scale back their lending.

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