ECB’s Constâncio: further regulation needed for shadow banking

To deal with the risks created by shadow banking activities or market-based finance new statistical definitions and adjusted reporting requirements are needed to include the quasi-money services provided by shadow banking in monetary statistics as well as to record changes in risk exposures generated by OTC derivatives in flow-of-funds statistics. Without this reporting, which should also include the flow of collateral among types of agents, a comprehensive risk assessment for the system as a whole, identifying the ultimate bearers of risk, is not possible. In Europe, the Securities Financing Transactions Regulation (SFTR) and European Market Infrastructure Regulation (EMIR) are first steps in that direction.

Data coverage alone is however not enough: regulation of the non-bank sector activities also remains insufficient.

The full speech is available at

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