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Fed focuses on shadow banking as it gauges financial risk

Tighter regulation of banks is prompting more borrowers to seek funding through US$25t shadow banking system

The focus is shifting to shadow banks after the Fed claimed success in its efforts to build up capital buffers at the nation's largest banks in a bid to avoid a repeat of the financial crisis.


FEDERAL Reserve officials, fresh from the latest round of tests designed to ensure the safety of the biggest banks, are now peering into the darker corners of the financial system as they assess the risks of another crisis.

One source of concern: tighter regulation of...

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