US financial institutions' $1tn loans to shadow banks raise concerns

US financial institutions have loaned over $1tn to shadow banks, up 12% in the past year. This is concerning regulators due to the lack of oversight and potential systemic risks. Banks are increasingly lending to hedge funds, private equity firms, and direct lenders. The Federal Deposit Insurance Corporation proposed requiring banks to disclose more data on their lending to shadow banks. This could lead to more detailed reporting starting next quarter.