Shadow Banking Remains, but Casts Smaller Shadow

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Nov. 12 (Bloomberg) -- Bloomberg View columnist Matthew C. Klein and Jonathan D. Becher, chief marketing officer at SAP, discuss why the shadow banking sector has not gone away in spite of increased regulations and look at the overall state of the banking industry. They speak on Bloomberg Television’s “Bloomberg Surveillance.”

Of that with new regulation.

Click the shadow banking sector is still very large.

Part of the problem is when people hear it, they think it is something that is completely secret.

Money market mutual funds are at certain type of shadow banks.

Some people are worried about -- the imf and jeremy stein has written about this book is called mortgage real estate investment trust.

Basically these are reits that go out and buy property and management, but they buy mortgage bonds.

Actually, the financial times had a piece about how shadow banks becoming the biggest beneficiary.

That is right.

Mortgages are a fine example of that.

The concern that some people have over the imf and fed and elsewhere is if rates start rising, losses in the mortgage bond portfolios could cause the repo lenders to stop lending to them, in which the case -- in which case they would have to stop lending to them -- right now they are relatively small within the universe of people who own mortgage bonds, about five percent or so.

Still significant and could cause problems.

Jonathan becker with us.

Sac perceived as a german company.

That is maybe true.

The surprise of 2013 has been the recovery of europe.

Higher interest rates could be a good story as well.

The banking sector is one of the strongest growth for folios.

Two trends helping us.

The banks want to get you -- want to get to know you as a person.

Back to the previous conversation with social media to figure out who you are.

Do you do banking on your cell phone?

This is one of the strongest growth industries.

Interestingly enough happening in emerging markets.

I feel when i am on my phone doing my thinking, i feel like someone is looking at me.

It is ridiculous.

Maybe you should get the new iphone with the fingerprint scanner.

What do you see in terms of appetite for spending, specifically in europe just getting out of recession?

We do not see it in the classic pay upfront and treated as a capital investment but more as a subscription will.

Investment paid over several years.

People are still interesting but investing for the long haul.

Getting you a data check right now as we move poster toward the open up the market right now.

S&p futures down by almost three

This text has been automatically generated. It may not be 100% accurate.

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