Shadow banking involves entities and activities outside the regular banking system, and statistical data collection in many parts is still quite sketchy. Obviously, there is an urgent need for central banks to be given an extended mandate for the collection of data not only from banks but also from non-bank financial institutions. What can be done in the short term?
As you know, there are two standard prescriptions frequently recommended as an initial remedy. The first of these is an extended analysis of flow of funds data. The second is an evaluation of counterparty information from balance sheet statistics. As regards the flow of funds, these transmit an idea of the main structures of the financial system: no more, but no less.