Luigi Federico Signorini: The regulation of non-bank finance - the challenges ahead

Speech Mr Luigi Federico Signorini, Deputy Governor of the Bank of Italy, at the Conference "Economic Policies, Trade Integration and Sustainable Job Creation. A View from the Mediterranean Countries", organized by the Bank of Spain and the European Institute of the Mediterranean with the support of the Central Bank of Tunisia, Tunis, 16 November 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

With the completion of Basel 3, the post-crisis overhaul of banking regulation is essentially over; with a limited number of exceptions, the only issues remaining for the next few years will be the implementation of reforms and the evaluation of their effects, intended or otherwise, over time. Banks, however, do not comprise the entire financial sector. Arguably, non-bank financial intermediation has taken on an increasing role in the global financial system and poses new challenges to regulators. The attention of international coordinating bodies such as the FSB is therefore now mainly, and rightly, directed towards what used to be known by the vaguely derogatory name of 'shadow banking' but is now more neutrally termed 'non-bank financial intermediation'. The aim of this speech will be to explore the emerging risks from non-banks, to describe the (not insignificant, but still inchoate) regulatory response so far, and to speculate about a possible agenda for the medium-term future.