New regulations put forward by the European Commission (EC) will include rules relating to shadow banking.
That is according to Michel Barnier, the official in charge of regulatory reform on the continent, who has revealed that policymakers are planning to introduce a range of new controls over this $61 trillion sector.
This course of action has been designed specifically after the EC faced criticism from analysts for acting too slowly with regard to controlling this industry - which has been blamed with having a significant role in the economic downturn.
Mr Bernier commented: "What we do not want is for financial activities and entities to circumvent existing and foreseen rules, allowing new sources of risk to accumulate in the financial sector."
With this in mind, the official went on to say this is evidence to suggest that policymakers need to have a stronger understanding of the nuances of shadow banking and how it can be properly controlled.
By Tony Aynsley