A December IMF staff discussion note, authorised by chief economist Olivier Blanchard, reveals that shadow banking now accounts for 25 per cent of global financial assets. It is described by the Financial Stability Board, an intergovernmental body coordinating financial sector regulation, as “credit intermediation involving entities and activities outside the regular banking system”. Showing the “systemic risks” from shadow banking, such as “runs on private ‘safe’ assets” which in turn jeopardise “the public safety net”, the note is at odds with the Fund’s longstanding endorsement of financial deepening (see Update 82). In January, speaking at the World Economic Forum in Davos, IMF managing director Christine Lagarde nevertheless warned of a “waning commitment” to financial reform.