BoE sounds alarm on shadow banking

Bank of England deputy governor Paul Tucker is sounding the alarm over risks brewing in the opaque world of hedge funds and shadow banks, reports the Financial Times.

Read: Basel proposes beefed up “shadow bank” rules

He said “it would be ‘absolutely disastrous’ if the economic fragility of banks was recreated outside the mainstream banking sector. He drew an explicit parallel between the current situation and 2004, when super-low rates sowed the seeds for a search for yield that culminated in the crash of 2007-09,” explains the report.

Read more here.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.