The Financial Stability Board has launched a new public effort to craft a framework for shadow banking following very slow progress on its initial approach and a June decision by the International Organization of Securities Commissions (IOSCO), an FSB organization, to reject designation in favor of a focus on regulation of risky activities and practices. Reflecting this, the latest FSB effort turns to the economic function of non-banks other than money-market funds (MMFs). It looks not only at what member nations have done through a peer-review survey, but also at what the policy community believes should be done to limit systemic risk in this complex and controversial sector.

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