Financial risks ballooning in the shadow

Over the past 6 months we have seen an increase of risk and a risk rotation: issues are harder to monitor and to assess.

Negative interest rates are creating pockets of overvaluation of asset prices. Also, the banking industry is under a closer scrutiny, which has greatly benefited fund managers (mutual funds, exchange-traded funds, hedge funds and other institutional investors). They currently buy and sell 40% more securities than a decade ago: a total $76 trillion –the size of the world’s GDP.

The IMF has called for greater oversight of the so-called shadow banking business, including the introduction of stress tests for asset managers similar to the banking system’s. The US Securities and Exchange Commission is currently studying the request.



About the Author

Ana Fuentes
Columnist for El País and a contributor to SER (Sociedad Española de Radiodifusión), was the first editor-in-chief of The Corner. Currently based in Madrid, she has been a correspondent in New York, Beijing and Paris for several international media outlets such as Prisa Radio, Radio Netherlands or CNN en español. Ana holds a degree in Journalism from the Complutense University in Madrid and the Sorbonne University in Paris, and a Master's in Journalism from Spanish newspaper El País.

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