EU to introduce more rules to address shadow banking risks

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BRUSSELS, Sept. 4 (Xinhua) -- European Union Internal Market and Services Commissioner Michel Barnier on Wednesday proposed new rules for money market funds (MMFs) and tighter regulations for so-called shadow banking.

The draft regulation has been designed to ensure MMFs can better withstand redemption pressure in stressed market conditions by enhancing their liquidity profile and stability.

Shadow banking is the system of credit intermediation that involves entities and activities that are outside the regular banking system. They are not regulated like banks yet engage in bank-like activities. MMFs, types of investment funds and products with deposit-like characteristics are parts of shadow banking. Read more...