Shadow banks need tighter regulation, ECB's Schnabel says

FRANKFURT (Reuters) - Non-bank financial firms, more commonly known as shadow banks, need tighter regulation as their increasing risk profile could impair central bank policy during periods of stress, European Central Bank board member Isabel Schnabel said on Tuesday.

"To preserve financial stability and protect policy transmission, the current regulatory landscape needs to better reflect the fact that credit intermediation increasingly takes place outside the banking sector," Schnabel, the head of the ECB's market operations, told a conference.

"Non-banks have taken on substantial duration, liquidity and credit risks on their balance sheets," Schnabel said. "This also comes with new risks that may impair policy transmission in periods of financial stress."

(Reporting by Balazs Koranyi; Editing by Edmund Blair)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Greece proposes European Spectrum Union to raise billions for EU budget from 6G mobile
• Analysis-There's a reason Trump is the only one talking about 1% rates
• BofA forecasts two BoE rate hikes as energy prices stoke inflation concerns