Such non-bank investors, which include actors as diverse as asset managers and hedge funds, have largely been spared the regulatory ramp-up banks have seen since the 2008-2009 financial crisis that required them to hold more capital.
That has led to concerns, often among banks, that there is not a level playing field among financial market players, with shadow banks getting off lightly to their advantage.
ECB governing council member Christian Noyer said that duplicating bank rules for non banks could cause all investors to take the same positions at the same time, leading to a "one way" market of violent moves in one direction.
"This herd behaviour can lead to detrimental consequences in terms of financial stability by amplifying an irrational market decision based upon no fundamentals, which could rapidly spread to the whole financial sphere," Noyer told a conference on non-bank regulation at the Bank of France.
Since the financial crisis, the biggest banks have been deemed important to global financial stability and have been forced to hold more capital against the risks they take.
Concerned that large swathes of markets remain little supervised, regulators have also been looking into whether and how to increase restrictions on shadow banks.
But the Financial Stability Board, a forum that sets the agenda for regulation at an international level, has for now held off on recommending that asset managers be designated as important to the financial system.
Bank of England deputy governor Jon Cunliffe said that regulators' approach to shadow banking should focus on short-term stress testing and making sure funds can handle client redemptions.
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