Better data is needed to spot risks from “shadow banks” stepping up credit to heavily indebted companies, an annual survey of the non-banking financial system said on Monday.
The Financial Stability Board (FSB), a body of regulators that coordinate financial rules for the Group of 20 Economies (G20), said leveraged loans warranted closer attention given the potential for spillovers into other markets if something went wrong.
“Given these developments ... it is important to consider enhancing data/information collection so as to have clearer view of the market and its risks,” the FSB said in its Non-Bank Financial Intermediation report for 2017.
Non-bank or “shadow bank” finance refers to credit generated outside banks, such as by collective investment vehicles, broker-dealers and funds that invest in bonds and money markets.
The FSB said its “narrow” measure of shadow banking grew by 8.5 percent to $51.6 trillion in 2017, or 14 percent of total global financial assets.
Read more in Reuters.