Global Shadow Banking Has Ballooned to $71 Trillion

Shadow banking assets grew by an estimated $5 trillion in 2012 to a total of $71 trillion, mainly due to the general rise in financial markets, according to the Financial Stability Board (FSB).

In its third annual survey of the world of shadow banking, which has been expanded to include hedge funds along with insurance companies, pension funds and public financial institutions, the FSB said the rise last year measured on a broad basis amounted to 8.1 percent, up from an 0.6 percent rise in 2011.

In general, shadow banking – or non-bank financial intermediaries – forms a large proportion of financial systems in advanced economies and was largely stable last year but the FSB said shadow banking had grown strongly in emerging markets, up by over 20 percent, though from a small base.

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— EconMatters

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