Top ECB official sounds alarm on rising risks from shadow banking

  • 📰 ftenergy
  • ⏱ Reading Time:
  • 26 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 14%
  • Publisher: 63%

Finance Finance Headlines News

Finance Finance Latest News,Finance Finance Headlines

Elizabeth McCaul says rapid growth of lightly-regulated lenders could translate into ‘systemic’ threat

A senior European Central Bank official has said the “remarkable” growth of private funds and other sources of finance outside the regulated banks is the biggest threat to the stability of the Eurozone’s financial system. “There are certainly caution lights in front of us,” Elizabeth McCaul, an ECB supervisory board member, told the Financial Times. “The most prevalent one is the area into which we likely have the least visibility and where things can move faster than . . .

She said Europe’s banking sector had “proven quite resilient in the face of some very significant challenges in the last few years,” after capital levels rose almost a quarter and non-performing loans shrank by two-thirds in the past decade. But the rise of shadow lenders reminded her of the collapse of US hedge fund Long-Term Capital Management in 1998 when she was superintendent of banks in New York. “You learn your lessons on the job,” she said. “I suspect correlation risk is occurring again.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 47. in FİNANCE

Finance Finance Latest News, Finance Finance Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Markets ignore the internal politics of central banks at their perilThere are significant institutional constraints on the Fed and the ECB’s room for manoeuvre
Source: FT - 🏆 113. / 51 Read more »