Ambrose Evans-Pritchard — Shadow banking now poses top risk to US stability, warns IMF

Non-financial lending has reached $15 trillion since the crisis and is outside the control of authorities warns the Fund's deputy chief.…

The US shadow banking nexus is coming back to haunt like some hydra-headed beast and now poses the biggest potential threat to the American financial system, the International Monetary Fund has warned.

Zhu Min, the IMF's deputy chief, said regulators have successfully cleaned up much of the global banking system since the Lehman crisis, but the excesses have moved off books and are once again growing to disturbing proportions.

"The key risk has shifted to shadow banking," he said, speaking at the World Economic Forum in Davos. 

While the explosion of China's shadow banking is well-known, Zhu Min said there has been a surge of lending by asset management funds and others non-bank players to US companies. This is outside normal control and is hard to track.

The Telegraph
Shadow banking now poses top risk to US stability, warns IMF
Ambrose Evans-Pritchard