Firms such as Blackstone Group LP, Apollo Global Management LLC and Fortress Investment Group LLC are often slapped with the vaguely sinister label, shadow bank, because they provide financing but aren’t regulated like traditional lenders.
President Donald Trump’s Treasury Department now says that’s unfair and wants global regulators to stop using the term when describing investment giants.
“The word ‘shadow’ could be interpreted as implying insufficient regulatory oversight, or disclosure,” Treasury said in a 163-page report released Thursday, which advocates an easing of restrictions on asset managers and insurers. Use of the term is “particularly inappropriate” for investment companies that are overseen by the Securities and Exchange Commission and file routine reports to the agency, Treasury added.
Read more in American Banker.