Executive Director for Financial Stability Strategy and Risk, Alex Brazier, opens the conference on non-bank financial institutions and financial stability, held at the Bank of England on 28 September. He reflects on the role that shadow banks (largely unregulated financial intermediaries) played in contributing to the financial crash of 2008 and how they helped spread problems in the financial system.
He highlights that non-banks such as investment funds, pension funds and insurance companies have now taken the place of shadow banks, the financial system is more diverse, banks are better capitalised and that derivatives markets are safer. He finishes by adding the Bank remains vigilant to risks by running simulations on whether they could appear down the line.
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