Global trends of shadow banking

Observed data displays an increase in shadow banking activity at a global scale. Although its size relative to the overall financial system is still larger for developed economies (areas with a good institutional framework and a deeper credit market), it is growing at a faster pace in some emerging countries, especially China. While implications of these global trends for financial stability are not yet clear, it is essential to maintain shadow banking activity monitoring in order to implement the necessary regulation to mitigate both systemic risk and competitive distortions.

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