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BRUSSELS (Reuters) - The European Commission is widening its regulatory sweep to include "shadow" banking, heralding new controls over the sprawling and largely unchartered 46 trillion euro ($61 trillion) sector blamed for helping trigger the financial crisis.

The EU's executive launched a consultation with industry on Monday with a view to writing rules to control shadow banking, a term describing activity resembling banks' basic borrow-and-lend model, but often taking place beyond the watch of regulators.

It opens up a new front in the regulatory drive of Brussels, which some analysts believe has been slow to tackle the causes of a financial crisis that struck Europe roughly five years ago.

"What we do not want is for financial activities and entities to circumvent existing and foreseen rules, allowing new sources of risk to accumulate in the financial sector," said Michel Barnier, the EU official in charge of regulatory reform.

"That is why we need to better understand what shadow banking actually is and does, and what regulation and supervision may be appropriate."

Political leaders are aware of the potential problem that shadow banking presents and the Group of 20 top global economies have asked their task force, the Financial Stability Board (FSB), to come up with plans to regulate the sector.

That will give a lead to the European authorities in finalizing their plans.

The chairman of Britain's Financial Services Authority, Adair Turner, has called for radical plans to regulate shadow banking, saying last week that the system may be too complex for regulators to understand.

Hedge funds and private equity are often cited as examples of shadow banking. But the term can also take in investment funds and even cash-rich firms that lend government bonds to banks, and which in turn use them as security when taking credit from the European Central Bank.

Shadow banking can also refer to offshore vehicles such as those that banks used before the crisis for leverage, as well as money-market funds taking deposits from companies.

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EU considers new controls for shadow banking