Shadow banks are non-bank financial entities that take the same type of risk as banks (maturity transformation) without having access to refinancing from the central bank. They are not subject to the same prudential requirements and controls as banks. Although they were identified as an important factor of systemic risk during the financial crisis of 2008-2009, the regulatory reforms that followed did not have a lasting impact on their development. Shadow banks can therefore always become a source of systemic risk, both directly and through their interconnections with the banking system.

Prof. Richard Portes who chairs the Advisory Scientific Committee of the European Systemic Risks Board (ESRB) will share with us his views on shadow banks and the risks resulting from their interconnections with EU banks.