Central Bank Deputy Governor Cyril Roux today outlined the regulator’s work in the area of shadow banking.

Mr Roux detailed his view In a public dialogue at the European Institute of Financial Regulation with Gerard Rameix, Chair of the AMF, the French securities and markets authority.

Welcoming the Financial Stability Board’s (FSB) monitoring framework in the area of shadow banking, Mr Roux stressed the importance of capturing all elements of shadow banking in the non-bank financial sector in this exercise. 

Deputy Governor Roux stated that the “identification and monitoring of systemic risk from market-based finance is crucially important, but methodologies and data availability are at an early stage of development, especially when compared to the more traditional banking sector. The FSB’s work in this area has been a welcome addition to the debate, particularly in relation to the economic functions.” 

“These are helping to refine both the statistical exercise of measuring total shadow banking and the risk assessment further by categorising entities based on the specific activities they undertake which could threaten financial stability. Given the international nature of shadow banking, the regulatory reform debate must continue to take place at an international level.” He added. 

Source: www.businessworld.ie