Reuters: Central bankers warn against extending bank regulations to shadow banks

* Capital buffers for shadow banks could fuel swings – Noyer

* Non-banks have largely escaped bank regulatory surge for now

* Fed’s Tarullo says regulators should focus on liabilities

PARIS, Sept 28 (Reuters) – Extending bank regulations to the so-called shadow banking sector is not only probably unfeasible but may fuel market swings, several central bankers said at a conference on Monday.

Such non-bank investors, which include actors as diverse as asset managers and hedge funds, have largely been spared the regulatory ramp-up banks have seen since the 2008-2009 financial crisis that required them to hold more capital.

That has led to concerns, often among banks, that there is not a level playing field among financial market players, with shadow banks getting off lightly to their advantage.

ECB governing council member Christian Noyer said that duplicating bank rules for non banks could cause all investors to take the same positions at the same time, leading to a “one way” market of violent moves in one direction.

The full article is available here.

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