Buyer Beware
Shadow Banking and the Troubling Story of First & Peoples Bank
The financial sector is buzzing with discussions on shadow banking, with top regulators warning about its potential risks to global stability. Shadow banking, or non-bank lending, is not a new concept, but its rapid growth and increased ties to traditional banks have regulators concerned about its impact on the financial ecosystem. Recent statements from financial watchdogs, including Klass Knot of the Financial Stability Board (FSB) and Elizabeth McCaul of the European Central Bank, stress the vulnerabilities shadow banking presents, particularly in light of rising non-performing loans and deteriorating asset quality among smaller financial institutions like First & Peoples Bank.
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