Speaking in his role of chairman of the international Financial Stability Board, Mark Carney said on Monday that aspects of shadow banking considered to have contributed to the financial crisis have declined significantly and generally no longer pose financial stability risks.
Benjamin Cole via Historinhas | Probably bank and other financial institution bailouts, within context, are positive for the economy. Indeed, aggressive robustly financed bailouts should be conventional policy, while other regulations eschewed, as long as shareholders and convertible bondholders take the first, big and hard hit of any major financial institution failure.
BBVA Research | Transforming shadow banking into resilient and market – based financing is one of the four core elements of the global financial regulatory reform undertaken by the G20 in 2008 at its first meeting in Washington . But prog ress towards achieving this goal is uneven and there is still work to be done. The implementation of the agreed measures is in an incipient phase. The most significant advances have been in improving transparency and aligning incentives in securitisation.
MADRID | By Ana Fuentes | She believes that central banks should act coordinately, since competition between them can cause currency distortions. British economist and former banker Frances Coppola has been one of the main critics of the European Central Bank’s QE “because it supports asset prices, but that is all it does.” She spoke to The Corner about shadow banking and how financials should be accepting and managing risk on both sides of the Atlantic.
MADRID | The Corner | As the global economy’s last data disappoint, shadow banks could be “compromising” growth even more, the IMF’s Global Financial Stability Report released Wednesday pointed out. Since “banks representing almost 40 percent of total assets are not strong enough to supply adequate credit in support of the recovery,” Financial Counsellor José Viñals said, controlling their non-regulated peers remains a great challenge.
Iris Mir | Tight control of capital accounts has pushed China to a financial deadlock. Chinese savers are looking to new online investment platforms amid a lack of substantial wealth management options. Last year China’s Internet payment platform launched the online investment platform Yu’e Bao to offer its users the possibility of investing the idle money on their Alipay accounts and getting much higher benefits than any traditional bank. More than 43.03 million people already enjoy its advantageous financial products. The opportunities of this business model are huge and many other Chinese internet giants are following suit.
Richard Saunders, chief executive at the Investment Management Association, calls for clarity on which entities are or are not ‘shadow banks’. Saunders makes the point that asset managers are not the same as banks because they don’t pose any systemic risk.