This note outlines the basic economics of the shadow banking system, highlights (systemic) risks related to it, and suggests implications for measurement and regulatory approaches.

This paper focuses on the issue of the information asymmetry between <p> the Federal Reserve Bank and commercial forecasters. Previous theoretical and <p> empirical evidence suggests that in the absence of confidential supervisory <p> information, commercial forecasters either under- or over- predict...</p></p></p>