-Financial rules designed to make the financial system safer need to encompass nontraditional banks, European Central Bank Vice President Vítor Constâncio said on Thursday.
While much has been done since the crisis to make the financial system safer, "as credit intermediation and liquidity creation extends to the nonbank sector, it is important to expand our regulatory and policy efforts to the shadow banking sector," Mr. Constâncio said. He was making opening remarks at a conference at the central bank.
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Mr. Constâncio also said that more work needed to be done to make derivative markets more secure.
"One area that still lacks reform concerns re-hypothecation and re-use of collateral," he said.
"The recent reports by the Financial Stability Board are in my view not sufficiently far-reaching, and initiatives on the international level to limit collateral velocity have largely stalled," he said.
"We need to take up this agenda again, even if not easy in the current environment. Indeed, the trend seems to go in the opposite direction."
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(END) Dow Jones Newswires
May 11, 2017 04:08 ET (08:08 GMT)