IMF urges more oversight of US$70t shadow banks

[WASHINGTON] The International Monetary Fund (IMF) urged regulators to pay closer attention to a shadow banking system that has grown to more than US$70 trillion worldwide to help prevent risks from building outside the bounds of traditional financial oversight.

"Shadow banking tends to take off when strict banking regulations are in place, which leads to circumvention of regulations," Gaston Gelos, chief of the IMF's global financial analysis division, said in a statement accompanying portions released on Wednesday of its Global Financial Stability Report. The full report…