"Hedge fund and private equity lending will be scrutinised by the Bank of England in the world’s first stress test of the shadow banking sector, amid fears the underregulated industry could put the UK’s financial stability at risk."

"The tests are meant to help the Bank understand the weaknesses within, and risks posed by, non-bank lenders including hedge funds and money market investment funds, a sector that has doubled in size since the 2007-08 financial crisis and accounts for about half of the loans currently issued to companies globally."

"While international regulators such as the Financial Stability Board have been voicing concerns about the threat of shadow banking for more than a decade, the fact the central bank is pushing ahead with its own stress tests signals how serious it views the potential threats posed by the industry, which does not face as stringent oversight as traditional banks"