EU Commission takes aim at shadow banking sector over 2008 meltdown

The EU Commission is taking aim at the shadow banking sector, which it blames for accelerating the financial sector meltdown in 2008.

The Commission has issued proposed regulations that would introduce much stricter conditions for shadow banking entities operating in the EU.

The global shadow banking system is estimated to be worth $51tn and accounts for up to 30% of the global financial system. Hedge funds are the most common type of investment funds that make up the shadow banking system, which are not subject to the same regulations as the conventional banking sector.