Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Sign up for Axios NW Arkansas
Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters
Banks are healthier and taking on less risk, but that doesn't necessarily mean that the financial system is safe. The risk has largely just moved outside the banking system to the so-called shadow banking industry, ratings agency Fitch said Tuesday.
What it means: Shadow banks are financial institutions outside the traditional banking sphere that aren't governed by U.S. banking regulations.
Fitch warns:
- "Shadow banking's ascension may signal growing systemic risks."
- "Shadow banking [is] exhibiting notable post-crisis growth, driven by bank regulation, low interest rates, the favorable economic backdrop and the growth of financial technology."
Why it matters: The risks could include "direct and indirect exposures faced by banks, insurance companies and pension funds, reduced financing availability for banks and non-financial corporate borrowers, and increased asset price volatility," Fitch analysts note.
- The shadow banking industry held $52 trillion globally, 13.6% of total financial assets, at the end of 2017. That's up from $30 trillion at the end of 2010, according to the Financial Stability Board.
Go deeper: Fitch thinks Venezuela will get worse before it gets better