Need to monitor 'shadow banking' in India: FSB

Nov 19 2012, 20:56 IST
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monitoring Shadow banking. (Thinkstock photo) monitoring Shadow banking. (Thinkstock photo)
Summary'Shadow banking' activities in India has given a sharp annual growth of over 20 per cent.

are data gaps regarding the small non-deposit taking NBFCs, but these affect an insignificant share of the sector.

"Requiring detailed disclosures by small NBFCs similar to the ones provided by the larger NBFCs would be too onerous for them and not commensurate with their size," said the case study, prepared on te basis of presentation by RBI.

"The NBFC sector is within a well-defined regulatory perimeter and not perceived to pose significant systemic risks at present. However, there are aspects which could pose systemic risks or give raise to regulatory arbitrage concerns," it added.

Globally, the shadow banking system represents an average 25 per cent of financial system assets and 111 per cent of the aggregated GDP.

FSB said that the size of global shadow banking system, on a conservative basis, grew rapidly before the crisis, rising from USD 26 trillion in 2002 to USD 62 trillion in 2007.

The size of the total system declined slightly in 2008 but increased subsequently to reach USD 67 trillion in 2011 (equivalent to 111 per cent of the aggregated GDP of all jurisdictions).

GLobally, the US has the largest shadow banking system (USD 23 trillion), followed by the Euro area (USD 22 trillion) and the UK (USD nine trillion).

Compared to last year¿s estimate, expanding the coverage of the monitoring exercise has increased the global estimate for the size of the shadow banking system by some USD 5 to USD 6 trillion.

On an worldwide basis, the aggregate size of the shadow banking system is around half the size of banking system assets.

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