Lender links to shadow banking to cost more | Reuters - 0 views
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"It can also create opportunities for arbitrage that might undermine stricter bank regulation and lead to a build-up of additional leverage and risks in the overall financial system," the FSB said in a statement."Short-term deposit-like funding of non-bank entities can lead to 'runs' in the market if confidence is lost," the FSB said.
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The FSB is pursuing a two-pronged approach to regulating the sector -- the banks that support it and the shadow-banking entities themselves.
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Possible approaches to regulation
