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OpEdNews Op Eds    H2'ed 11/13/19

Shadow Banking a Growing Threat to Global Financial Stability

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A new global financial regulatory agency, the Financial Stability Board (FSB), quietly emerged from the dust of the Great Recession of 2007. "The FSB's creation came after the G20 Summit in London in April 2009.

Headquartered in Basel, Switzerland, the board includes all G20 major economies. The FSB consists of 68-member institutions. It comprises several central banks, ministries of finance, and supervisory and regulatory authorities from 25 jurisdictions, as well as 10 international organizations and six Regional Consultative Groups (RCGs). It's stated purpose seems to be, "... policy work to enhance the resilience of non-bank financial intermediation... [focusing] on those parts of non-bank financial intermediation that perform economic functions which may give rise to bank-like financial stability risks."

In other words, global shadow banking and finance networks have grown so large and powerful that they pose a threat to the whole nation-based international banking and finance system.

The Financial Stability Board says they are responsible for:

· Preparing annual reports on the implementation of reforms and their effects

· Coordinating financial sector policies

· Conducting outreach activities [To WHOM?]

· Building resilient financial institutions

· Addressing SIFIs [Systemically Important Financial Institutions]

· Making the derivates market safer [Which was the epicenter of the financial collapse in 2007]

· Enhancing the resilience of non-bank financial intermediation [NBFI]

· Formulating additional policies on specific areas of the global financial market

· Preparing progress reports to the G20

. Conducting peer reviews

· Analyzing the effects of reforms

So, this is an autonomous international agency reporting to the G20, yet it is independent of the G20 or any other democratically elected government authority. It analyzes and proposes and monitors non-government enforced regulations of cross-border financial interactions between traditional international banking institutions and the global shadow banking institutions. It exists to keep the global economy on an even keel, and it prepares reports. Here is their 2018 report on the health and extent of global, non-standard financial institutions. Global Monitoring Report on Non-Bank Financial Intermediation 2018

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Brian Lynch is a retired social worker who worked in the areas of adult mental health and child protection for many years. His work brought him into direct contact with all the major social issues of the day and many of our basic social (more...)
 

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Bill Willers

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In the top of the diagram shown, what do "ICs" and "PFs" indicate?

Submitted on Wednesday, Nov 13, 2019 at 7:35:04 PM

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Brian Lynch

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Reply to Bill Willers:   New Content

Thank you for your question. The graphic is a depiction of connectedness between banking institutions, insurance corporations (IC) and pension funds (PF). The thickness of the arrows reflects the absolute size of the exposures [risk exposure] from a certain financial sector to the other. This is explained on page 30 of the full report.

Submitted on Wednesday, Nov 13, 2019 at 9:44:15 PM

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I should mention that reading the FSB report has sent me to the Google Machine multiple times to understand a whole new universe of financial acronyms. I am not an economist, and even if I were I suspect many of these terms would not be familiar. For example, FISIs is code for financial institutions that are too big to fail, NBFIs are Non-bank financial entities, and MUNFI represents the "monitoring universe of non-bank financial intermediation." So, good luck!

Submitted on Wednesday, Nov 13, 2019 at 9:54:38 PM

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Bill Willers

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Brian: I too cannot understand the economic jargon, but it's not the details but the INTENT of a separate financial system outside of public sight. I conclude that it involves the trillions of dollars pumped by the Federal Reserve into the financial sector (bypassing the public). It would seem that, in plain sight, although not a daily news item, that two distinct "lifestyles" are being created: a billionaire class living within a separate financial system and in unimaginable luxury, and then all the others using the visible banking system.

The diagram shows huge arrows pointing FROM IC and PF TOWARD the "non-bank system. If pension funds are based on the regular banking system, how is it they can be exposed to such financial risk from an entirely separate system?

Submitted on Thursday, Nov 14, 2019 at 6:42:41 AM

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Reply to Bill Willers:   New Content

Good question. I am just beginning to see how offshore accounts and shell companies work. To stumble across this report and discover the size and scope of this shadowy non-bank financial universe is an eye opener. This wealth is moving in and out of our traditional banking system every day. The term "money laundering" is to quaint an idea. Just think of how much easier it has become to transfer wealth off the books to, say, politicians you wish to control. Envelops of cash in Agnews day are most likely off-shore shell companies or anonymous bearer bonds today.

Submitted on Thursday, Nov 14, 2019 at 12:09:45 PM

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Reply to Brian Lynch:   New Content

Please correspond with me. billwillers@gmail.com

I think you've hit on something key to bringing the desired one world governing structure into being. But this aspect of it is being kept under wraps. The Fed has been on a weekly basis creating mountains of money, and people who were multimillionaire soon become billionaires and a year later are worth in the tens of billions. There is a class being created that is so vastly wealthy as to be a different creature altogether.

Submitted on Thursday, Nov 14, 2019 at 9:31:03 PM

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Lee Beacham

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Reply to Bill Willers:   New Content

If there were no billionaires, would you (or me) have more money?

Submitted on Thursday, Nov 14, 2019 at 11:26:23 PM

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Reply to Lee Beacham:   New Content

Yes, of course we would have more money. We would have a government far more responsive to the will of the people. We would have lower tax rates as and a much fairer collection of taxes. The rich would pay at least the same effective tax rate as the rest of us and there would be no tax avoidance schemes. We would probably have a living wage floor by now that would eliminate the need for taxpayer assistance to the working poor. this would raise all salaries. We would have better schools, better distribution of better healthcare, and better environmental laws. These are all items that are negatively impacted by the enormous influence of the Uber-rich.

Submitted on Friday, Nov 15, 2019 at 11:57:30 AM

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Lee Beacham

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Reply to Brian Lynch:   New Content

Socialism. Looks good in several paragraphs but can't be implemented by humans. I prefer Capitalism. It works automatically. It's a natural process that can be regulated effectively when regulations are openly applied to all participants. Socialism (or your example) requires political regulation, except there are no politicians trustworthy. Things will be perfect in Heaven. It's as good as it gets here. Try not to be so jealous of what others have. Plenty enough for everyone.

Submitted on Friday, Nov 15, 2019 at 5:44:11 PM

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Reply to Lee Beacham:   New Content

Yes, of course we would have more money. We would have a government far more responsive to the will of the people. We would have lower tax rates as and a much fairer collection of taxes. The rich would pay at least the same effective tax rate as the rest of us and there would be no tax avoidance schemes. We would probably have a living wage floor by now that would eliminate the need for taxpayer assistance to the working poor. this would raise all salaries. We would have better schools, better distribution of better healthcare, and better environmental laws. These are all items that are negatively impacted by the enormous influence of the Uber-rich.

Submitted on Friday, Nov 15, 2019 at 11:58:59 AM

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Brian Lynch

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Reply to Bill Willers:   New Content

You are free to private message me through OEN via my profile page.

Submitted on Friday, Nov 15, 2019 at 12:07:13 PM

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