Is it time for ‘shadow bank’ stress tests?


A leading member of Germany’s Bundesbank has backed U.S. calls for “shadow banking”, the unregulated sector that provides credit on a global scale, to be subject to stress-testing.

“Stress testing, as has been suggested, may be a good idea,” Andreas Dombret, a member of the Bundesbank’s executive board responsible for banking supervision, told CNBC on Tuesday.

“But if we were to go by this route, it should be directed to the link between the shadow banking sector and the banks. So it is not about introducing regulation, if there is no systemic link between this sector and the banks. That is what we really have to care about.”…

Is it time for ‘shadow bank’ stress tests?

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