EC presents Green Paper on shadow banking
The European Commission is looking at extending the scope of its financial regulatory reforms to encompass so-called “shadow banking” activities, as it launches a consultation on the issue that has risen up the global regulatory agenda in recent months. Changes concern the Capital Requirements Directive IV and its Solvency II initiative governing insurers, according a Green Paper published by the EC March 19. Shadow banking refers to the extension of credit to the traditional banking sector by lightly regulated firms such as specialist investment funds, hedge funds, private equity and some insurers. It has attracted the attention of global regulators including the G20, which has asked its Financial Stability Board to consider the shadow banking sector for tighter regulation. In its Green Paper, the EC outlined its understanding of the issue, its rules that already govern shadow banking, and existing draft rules that could be extended to cover shadow banking. Firms have until June 1 to respond to the consultation, while the EC also said it would host a conference on shadow banking in Brussels on April 27. Michel Barnier, the commissioner responsible for internal market and services, said at a press conference to announce the launch of the consultation: “We do have to create effective regulation and supervision, otherwise we know that the financial industry – which is extremely imaginative and often very innovative – may well transfer part of its activities and more risky products into this area which is unregulated and with all the concomitant risks of the previous crisis. Klasa Daily reports.
Source: http://www.focus-fen.net
(20.03.2012)