IBFed responds to the FSB on shadow banking -11/07/11

11 Jul 2011

IBFed has responded to a background note on shadow banking, which was published by the Financial Stability Board (FSB).
We noted that the form of the shadow banking system is closely linked to regulation and measures which directly regulate the shadow banking system may have potential implications for liquidity and the proper functioning of markets. We also recommended policy principles that should be recognised in pursuing the regulation of shadow banking. The principles are that measures (1) Promote proper functioning of markets, (2) Reduce the likelihood of duplication, (3) Minimize economic impacts, (4) Promote a level playing field, (5) Enhance transparency, (6) Target regulatory supervision, and (7) Support financial stability.

The IBFed letter is available here.