The post-Crisis regulatory architecture was built to reinforce the core: higher capital, stronger liquidity, tighter controls on risk-taking within banks. But as those reforms took hold, a new dynamic began to unfold — regulated activity started moving out of the regulated sector. Credit intermediation, asset management, payments, infrastructure, and even deposit-like functions migrated beyond the walls of traditional supervision, reshaping the contours of systemic risk.
This is not a new story, but its implications are reaching new heights. Today, non-bank financial institutions hold more global assets than does the traditional banking sector. Private markets outpace their public counterparts in growth and opacity. Fintech partnerships test the limits of charter-based accountability. And critical financial infrastructure is often housed in firms that were never meant to be regulated as financial entities at all. The regulatory perimeter, once encircling known actors, must be redrawn to accommodate the new contours of global finance.
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