Draft consultation from the EU shows that shadow banking has its benefits and risks. The European Commission is working to ensure the stability of financial entities that operate on the fringes of the traditional system. Rick Watson, a managing director at AFME, noted challenges faced by regulators as they tackle the shadow-banking sector. "The scope is pretty broad, but it is important to get the facts on the table and consider what activities could pose a risk," he said. "If presently regulated, who regulates them? If not, should they be regulated?"
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