The global banking industry called for regulators to take a case by case approach to how they supervise shadow banks, and despite concern of regulatory arbitrage, said imposing new capital requirements on non-banks is not always the best approach. Supervision of the sector is being tightened after the collapse of Lehman Brothers fueled the financial crisis of 2008, and the international Financial Stability Board is to submit recommendations to the Group of 20 major nations.
The Institute of International Finance (IIF), a global association of financial institutions, issued the call for tailored supervision of non-banks the day before a G-20 summit in Los Cabos Mexico. The IIF report, Shadow banking: a forward-looking framework for effective policy, calls for a new approach to a wide range of non-banking financial activities, which includes securitizations, repos, securities lending and money market funds.
IIF supports a “differentiated approach to this disparate range of activities,
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