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The good news about proposals to regulate shadow banking is that we are probably approaching the end of a long regulatory tunnel. An alternative view may be that the regulatory tsunami is slowly turning into a more ordinary wave of regulations. Indeed, the term “shadow”, although not very flattering for the industry, would suggest that regulators have addressed the body casting the shadow, as identified in the G20 regulatory agenda. As body and shadow are two sides of a coin, the bad news is that this regulatory topic may add several additional hits to already well regulated entities or activities. Recently, the FSB (Financial Stability Board, a joint committee between securities regulators, IOSCO, and banking regulators, BCBS) has issued several consultation papers on its forward...
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