Mr. Aidan Carrigan:

That is a very fair opening question. The term "shadow banking" is very unfortunate because it suggests some misdeed is taking place in the shadows of banking. It was not intended in that sense, although that is often how it is understood. The term reflects a large financial sector that actually operates in parallel with the banking system and is integrated in some way with that system. In that sense, it shadows the banking system. I will give a broader view and then ask my colleagues to outline the various sectors that might be in the shadow banking sector.

The funds in the shadow banking sector are broadly equivalent to those in the banking sector. However, the non-banking sector is becoming more important, as one will know from the debate on how to fund SMEs and the limitations on bank funding. An increasing number in the economic sector are looking to the non-banking sector to raise funds. Within the shadow banking sector, there are huge funds industries investing funds on behalf of investors. They are investing in corporates and other companies, in addition to various financial instruments.