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<p>When appropriately conducted, shadow banking can benefit the economy by increasing
the availability of credit to a range of individuals or firms, and provide a valuable
alternative to bank funding. However, the Government is aware of the risks shadow
banking activities can pose to financial stability.</p><p> </p><p>To ensure that systemic
risks to financial stability are addressed, the Government has created the Financial
Policy Committee (FPC) within the Bank of England. In September last year, the Committee
agreed as one of its medium term priorities the identification and management of potential
systemic risks from shadow banking. Additionally at the international level, the Government
is actively supporting the effective regulation of the sector in EU policymaking,
and the UK authorities are playing an instrumental role in shaping the global regulatory
response at the Financial Stability Board.</p><p> </p><p> </p><p>The Financial Stability
Board’s Global Shadow Banking Monitoring Report 2013 includes its latest assessment
of the size of, and trends in, non-bank financial intermediation.</p>
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