The shadow banking system can broadly be described as credit intermediation involving entities and activities outside the regular banking system. Intermediating credit through non-bank channels can have important advantages and contributes to the financing of the real economy, but such channels can also become a source of systemic risk, especially when they are structured to perform bank-like functions (e.g. maturity transformation and leverage) and when their interconnectedness with the regular banking system is strong. Therefore, appropriate monitoring of shadow banking helps to mitigate the build-up of such systemic risks. The FSB set out its approach for monitoring the global shadow banking system in its report to the G20 in October 2011. This report presents the results of the third annual monitoring exercise following this approach, using end-2012 data. The report includes data from 25 jurisdictions and the euro area as a whole, bringing the coverage of the monitoring exercise to about 80% of global GDP and 90% of global financial system assets.
Bank of International Settlements
Bank of International Settlements
Restricted BIS Brief: Interdependencies among payment and settlement systems
What are interdependencies, and Why do they matter?
Interdependencies arise when the settlement flows, operational processes or risk management procedures of one system are related to those of other systems
Interdependencies potentially can simultaneously:
•Improve the safety and efficiency of payment and settlement processes
•Allow financial disruptions to be passed more easily and more quickly across systems, their participants and related markets, accentuating their role in transmitting disruptions (Ferguson report)