Regulators to focus on "shadow banking" The FSB, charged with introducing changes to reduce the risk of another crash, has reached agreement on major banking reforms but Mr Carney says there is still substantial work ahead to implement them. Mr Carney described other reform measures agreed so far for banks, including new leverage and liquidity ratios, as a "watershed moment." The financial crisis had shown that regulators did not understand the extent of the close links between banks and shadow banks. Many of them had not thought through the risks. "When the crisis hit, all these shadow banking risks collapsed back on the centre," Mr Carney said. Shadow banks, many with a tax haven base, do not take deposits and rely on short-term funding. But they have been included in wider G20 reforms on the banking system.