Global regulators have taken a landmark step towards taming risk in a key segment of the shadow banking system, outlining tougher rules on collateral for short-term lending which will affect both banks and non-bank players.

Shadow banks have emerged as a key regulatory concern as risk migrates out of the traditional banking sector, into more thinly policed reaches of the financial markets. Shadow banks can include a broad array of institutions engaged in bank-like activities, among them hedge funds, private equity groups and money market funds.

The Financial Stability Board last night published a framework imposing minimum requirements on the collateral needed when such groups borrow money from banks through short-term loans secured by stocks or bonds.