Shadow banking? Fuggedaboutit! Fidelity Investments recently sent a letter to the European Commission on its Green Paper on Shadow Banking detailing the Commission’s use of the term as “confusing” and “misleading”.

Specifically, Fidelity, which said it “has a deep understanding of a number of the activities that the Green Paper classifies as part of the shadow banking system,” said the term “shadow banking” should be discontinued in favor of terminology focusing on specific activities such as such as banks transacting with their non-bank counterparties, liquidity and maturity transformation and the provision of credit or transfer of credit risk, and securities lending and funding in the repo markets.

Also, the firm said some of the activities classified by the Commission as part of the shadow banking system “are quite transparent and adequately disclosed and do not fit within the proposed definition.”

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