Newsletter June 2012: Shadow banking index reveals sharp drop in sector

NEW YORK – The US shadow banking sector was some 25% smaller by the end of 2011 – at some $9.53 trillion -- than it had been at the end of 2004, and barely half the size it reached at its peak in 2008 before the worst of the financial crisis hit the markets and triggered the recession. This is the picture revealed by a shadow banking index compiled by the Deloitte Center for Financial Services, part of the professional services firm, in New York. Launched publicly at the end of May, the index tracks the size of the sector alongside the traditional banking sector.