We remain committed to applying a supervisory and regulatory framework to such firms that is tailored to their business mix, risk profile, and systemic footprint – consistent with the Collins Amendment and other legal requirements under the Dodd-Frank Act. The threats to financial stability from the shadow banking system do not reside solely in a few individual nonbank financial firms with large systemic footprints.
Significant threats to financial stability emanate from systemic classes of nonbank financial firms and from vulnerabilities intrinsic to short-term wholesale funding markets. Many of the key problems related to shadow banking and their potential solutions are still being debated domestically and internationally, but some of the necessary steps are already clear.