ECB official warns of rising risks from shadow banking

Summary: Elizabeth McCaul, an ECB board member, warns of the growing risks posed by shadow banking, with non-bank financial intermediaries holding €42.9tn in assets, surpassing traditional lenders. McCaul highlights concerns about opaque links to banks and past incidents like the Archegos collapse. The ECB is focusing on private equity and credit markets, aiming to enhance transparency and oversight. Financial watchdogs are working to mitigate risks in the lightly regulated sector.

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