The world of Arabian Gulf private wealth is facing increased scrutiny as global banking regulators aim their spotlights at the so-called "shadow banking" sector.
Shadow banking is a catch-all term for an industry that encompasses hedge funds, private equity firms and structured investment vehicles, which blossomed outside the conventional bank sector during the past decade. It accounted for as much as US$67 trillion (Dh246.11tn) of transactions globally last year. But many proved vulnerable to shocks during the financial crisis, which spilled over into the banking sector.
On Sunday, the Financial Stability Board (FSB), the body that coordinates international banking standards and which is best known for the Basel rules governing banks' capital adequacy, began a consultation for oversight of financial firms that do not fit into the traditional categories of banking, insurance and pension funds.
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