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Saturday 3 December 2016

Irish growth helps boost shadow banking to $36tr in global assets

Boris Groendahl

Published 15/11/2015 | 02:30

Shadow banking in Ireland amounted to €2.25bn at the end of last year
Shadow banking in Ireland amounted to €2.25bn at the end of last year

The global assets of the shadow-banking industry grew by $1.1 trillion to about $36 trillion last year, outpacing banks and other financial institutions and driven by growth in Ireland, the US and China, according to the Financial Stability Board (FSB).

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Ireland now accounts for close to 8pc of all global shadow-banking assets, primarily through the IFSC. Shadow banking in Ireland amounted to €2.25bn at the end of last year, or some 1,190pc of the State's GDP, according to latest figures.

Shadow-banking assets, captured under a new narrower definition designed to better isolate institutions that pose risks to the financial system, amount to 59pc of gross domestic output and 12pc of all financial assets in the 26 countries participating in the FSB's annual survey, the Basel-based regulator said last week.

While regulators have reined in excessive risk-taking by banks in the wake of the collapse of Lehman Brothers Holdings in 2008, they are concerned that lenders might use shadow banking to evade the clampdown and cause risks to build up out of sight of regulators.

The Group of 20 nations asked the FSB to keep track of the industry and develop rules to keep it in check.

Sunday Indo Business

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