In some ways, therefore, Korea was going along with a new international trend toward bringing together financial supervision within a single agency. The Republic of China, and Governor Fai-nan Perng will correct me if I am wrong, intends to set up an integrated financial supervisory body this July.
From a financial stability perspective, a raise of the shadow banking sector may create systemic risks that need to be better understood and measured. The sector is engaged in maturity transformation the same way as banks are. It was the proneness of banks to deposit runs that led the U.S. regulators, back in 1930s, to introduce deposit insurance to mitigate that risk.