Basel III and the Shadow Banking System

Question

I'm still trying to wrap my head around the full implications of Basel III for traditional banks, and how that's, in turn, impacting the growth and risk profile of the shadow banking sector. It feels like we're just shifting risk around sometimes. Are others seeing a significant migration of certain types of lending or activity away from regulated entities specifically due to the capital requirements, and if so, what are the primary regulatory blind spots you're most concerned about?

tuanrahman · Accepted Answer

It's not just a feeling; the capital requirements absolutely push certain activities, especially less liquid or higher-risk lending, out of the regulated banking sector. Traditional banks get tighter on capital, and the demand for that lending doesn't disappear, it just finds a new home with fewer regulatory burdens, often in the shadow banking system. It's a clear trade-off.

tor · Answer

That's an interesting point about just shifting risk. I'm wondering, do you think the shadow banking sector is actually more efficient in some of these areas, or is it purely about avoiding regulation and capital requirements?

teerapat_t · Answer

เห็นด้วยเลยครับว่าเหมือนเป็นการย้ายความเสี่ยงจริงๆ พอธนาคารที่ถูกกำกับเข้มงวดขึ้น กิจกรรมบางอย่างก็ไหลไปที่ Shadow Banking แทน ซึ่งอาจจะยิ่งทำให้ภาพรวมความเสี่ยงของระบบซับซ้อนขึ้นไปอีก

Basel III and the Shadow Banking System

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