US banks have loaned $1 trillion to less regulated 'shadow banks'

• US banks have given out $1 trillion of loans to non-regulated "shadow banks." 
• Regulators said that these alternative lenders increase banks' exposure to higher risk debt. 
• Several major banks including Citigroup and Wells Fargo have strengthened their ties with alternative asset lenders.

The amount of loans made by US banks to less regulated shadow lenders surpassed $1 trillion in January. 

Outstanding loans to non-depository financial entities like private equity firms and hedge funds reached $1.0024 trillion last month, representing a roughly 12.16% year-over-year surge from January 2023, according to data released by the US Federal Reserve on Friday. It has become one of banking's fastest-growing businesses at a time when lending volumes overall are growing at a slower rate.