The "shadow banking system" can broadly be described as "credit intermediation involving entities and activities outside the regular banking system". Although intermediating credit through non-bank channels can have advantages, such channels can also become a source of systemic risk, especially when they are structured to perform bank-like functions (e.g. maturity transformation and leverage) and when their interconnectedness with the regular banking system is strong. Therefore, appropriate monitoring and regulatory frameworks for the shadow banking system needs to be in place to mitigate the build-up of risks. The FSB set out its initial recommendations to enhance the oversight and regulation of the shadow banking system in its report to the G20 in October 2011. Based on the commitment made in the report, the FSB has conducted its second annual monitoring exercise in 2012 using end-2011 data. In the 2012 exercise coverage was broadened to include 25 jurisdictions and the euro area as a whole, compared to 11 jurisdictions and the euro area in the 2011 exercise. The addition of new jurisdictions brings the coverage of the monitoring exercise to 86% of global GDP and 90% of global financial system assets.