EU presents new laws to strengthen oversight of so-called shadow banking
European Commissioner for Internal Market and Services Michel Barnier addresses the media at the European Commission headquarters in Brussels, Wednesday, July 24, 2013. (AP / Yves Logghe)
Published Wednesday, September 4, 2013 8:11AM EDT
BRUSSELS, Belgium -- The European Union's executive arm is presenting new laws to strengthen oversight of so-called shadow banking, a sector of the financial system that holds trillions of dollars in assets but is not bound by the same rules as banks.
The EU Commission says investment vehicles such as money-market funds provide extra sources of financing for investors but can also pose threats to long-term financial stability.
Commissioner Michel Barnier is set to announce the legislation to regulate the growing sector Wednesday. The laws will require approval from the EU's 28 governments and the European Parliament.
The global shadow banking sector was estimated to encompass assets of about 46 trillion euros (currently $61 trillion) in 2010, or almost a third of the total financial system and half the size of bank assets.