https://www.rba.gov.au/speeches/2018/sp-ag-2018-12-10.html  5/10  12/10/2018  US Monetary Policy and Australian Financial Conditions | Speeches | RBA  Graph 3  For the very small share of liabilities that are not hedged with derivatives, there is almost always an offsetting high quality liquid asset denominated in the same foreign currency of a similar maturity, such as US Treasury Securities or deposits at the US Federal Reserve.
Former ECB executive board member Vítor Constâncio warned against the risks of shadow banking, and Luis de Guindos has continued along that line … I fully agree with him. As banks are regulated more strongly, some business has become much costlier for them to take on. A lot of business moved over into the shadow banking sector, which is interlinked to the banking sector.