Regulators must move on shadow banking, says Bundesbank board member
Evidence of more firms seeking ‘regulatory arbitrage’
Financial regulators must act to tighten regulation on the shadow banking sector, Andreas Dombret of the executive board of the Deutsche Bundesbank said in a speech today (September 30).
"In the context of low interest rates and tougher regulation" of the banking sector, there were "incentives for regulatory arbitrage" through shifting activities "somewhere outside the regulatory perimeter", Dombret told a conference in Frankfurt. "We are seeing significant movement in that direction," he added
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