How regulators are using banks to illuminate shadow banks
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The Federal Reserve has proposed new rules to gather details about banks' exposure to shadow banks. Regulators are concerned about systemic risks in lightly regulated and opaque shadow banks. The Fed wants banks to report detailed information about their lending to shadow banks, including entity type, collateral, and ownership by financial sponsors. However, regulators will still be blind to large portions of the sector. The Bank of England and the G20's Financial Stability Board are also collecting data on shadow banks. The Fed's proposal aims to collect granular information for stress tests, but it will take time to implement. Private equity firm Vista Equity is in talks to cede control of Pluralsight to private credit lenders. Regulators need to consider how private credit interacts with various entities, not just banks.
#FederalReserve #ShadowBanks #Regulation #SystemicRisks #PrivateCredit #BankOfEngland #G20 #StressTests
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