Central bank to examine shadow banking sector amid fears it could put UK financial stability at risk
Hedge fund lending will be scrutinised by the Bank of England in the world’s first stress test of the shadow banking sector, amid fears the under-regulated industry could put the UK’s financial stability at risk.
The tests are meant to help the Bank understand the weaknesses within, and risks posed by, non-bank lenders including hedge funds and money market investment funds, a sector that has doubled in size since the 2007-08 financial crisis and accounts for about half of the loans currently issued to companies globally.
Continue reading…Central bank to examine shadow banking sector amid fears it could put UK financial stability at riskHedge fund lending will be scrutinised by the Bank of England in the world’s first stress test of the shadow banking sector, amid fears the under-regulated industry could put the UK’s financial stability at risk.The tests are meant to help the Bank understand the weaknesses within, and risks posed by, non-bank lenders including hedge funds and money market investment funds, a sector that has doubled in size since the 2007-08 financial crisis and accounts for about half of the loans currently issued to companies globally. Continue reading…