Shadow banks may come under closer regulatory supervision under a draft policy that defines their functions and responsibilities, China Business News reported Monday, citing unnamed sources. The role of shadow banks, the extent of their business and their impact on the financial industry have been the subject of debate. The Chinese Academy of Social Sciences estimates that the shadow banking market could be worth as much 20.5 trillion yuan (US$3.38 trillion) as of the end of 2012. Tighter oversight will help manage systemic risks in the sector, Lian Ping, chief economist of Bank of Communications, was quoted as saying.
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