It will be essential to disaggregate all the activities that might be characterized as shadow banking in order to regulate those that pose risks to the financial system while not unduly burdening forms of credit extension that may more or less benignly help meet the savings and investment needs of households and businesses.
Also in 2007, the underlying rate of monetary expansion remains strong, as reflected in the continued rapid growth of M3 as well as the still high level of credit growth. Following several years of robust monetary growth and the continued vigour of the ongoing expansion in money and credit, liquidity in the euro area remains ample.