DBRS: Out of the Shadows – Drivers of Global Growth in FSB’s Shadow Banking

DBRS, Inc. (DBRS) published a commentary titled “DBRS: Out of the Shadows – Drivers of Global Growth in FSB’s Shadow Banking.”

DBRS sees significant risks stemming from continued growth in shadow banking globally. Assets are now at $52 trillion globally, up from $30 trillion in 2010 according to the FSB. Weaknesses in these nonbank FIs arising in their maturity intermediation, liquidity, leverage and credit transformation could result in runs that would exacerbate financial market stress. The U.S. has the largest concentration with 29% of global shadow banking assets. But, this is down from 48% in 2010, as other regions are growing faster. Fixed income funds, mixed funds, hedge funds and other collective investment vehicles are driving this shadow banking growth.