The world’s most powerful group of global financial policymakers has called for “urgent work” to address gaping holes in regimes to deal with failing clearing houses and insurers whose operations stretch across borders.
The Financial Stability Board, comprising central bank governors and regulators from 24 major economies, issued their call to action days after the global convening body for central banks warned that risks in shadow banks could force more bailouts and fuel runaway inflation.
After a decade of low interest rates, global markets have been jolted this year by soaring consumer prices. Central banks are curbing asset purchases and aggressively raising rates, and authorities fear violent moves could be amplified in the non-bank financial sector, which has taken a greater share of market activity since the 2008 financial crisis.