ECON published its report (dated 25 October 2012) on shadow banking. It proposes a motion for a Parliament resolution, which, among other things, calls for:

  • A data mapping exercise to obtain an overview of shadow banking so as to identify aspects of shadow banking which benefit the real economy and aspects which pose systemic risk or regulatory arbitrage concerns.
  • Amending the CRD to impose capital treatment of liquidity lines on structured investment vehicles (SIV) and conduits and setting the large exposure limit of 25% of own funds on all unregulated entities.
  • Legislative proposals on the separation of banks' retail and investing activities, on specific securitisation issues, on money market funds (MMFs) - to adopt variable NAV or submit to capital requirements (and in the context of the UCITS review to consider specific liquidity provisions and liquidity fees)- and on exchange traded funds (ETFs) to address complexity, counterparty risk, liquidity and possible regulatory arbitrage.

The European Parliament adopted a non-legislative resolution on 20 November 2012 on shadow banking which makes a number of similar proposals.

On 18 November 2012, the Financial Stability Board (FSB) published An integrated Overview of Policy Recommendations, which sets out the FSB's overall approach to shadow banking issues and policy recommendations to strengthen the oversight and regulation of the shadow banking system. It also published separate underlying reports on shadow banking entities and risks in securities lending and repos. These reports relate to two of the five key areas where the FSB considers policies are needed to mitigate the potential systemic risks associated with shadow banking. The FSB expects to publish final recommendations in September 2013. Comments on the FSB reports are invited by 14 January 2013.

The FSB also published its Global Shadow Banking Monitoring Report on 18 November 2012. The report summarises the preliminary results of the monitoring exercise conducted by the FSB's Analytical Group on Vulnerabilities (AGV) using end-2011 data as well as additional qualitative information and market intelligence. The report covers 25 jurisdictions (all 24 FSB member jurisdictions and Chile) and the euro area as a whole. It focuses on a "macro-mapping" based on national flow of funds and sector balance sheet data, which looks at all non-bank financial intermediation to ensure that data gathering and surveillance cover the areas where shadow banking-related risks to the financial system might arise.