The UK Treasury has a “limited grasp” of concerns linked to the booming shadow banking sector and may not be prepared for risks the unregulated industry poses to financial stability, peers have said.
While a lack of data makes it hard to say whether the $16tn (£12tn) non-bank financial sector could bring the wider financial system to its knees, officials do not seem to be alive to the potential risks, according to a Lords financial services regulation committee report.
