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The new credit office at Canada’s Public Sector Pension, which manages C$112 billion for federal public servants, will include loan originations and other alternative debt securities, said Jessica McEachern, a PSP spokeswoman. Over time, the intent is to transfer the expertise it builds in the U.S. to Montreal, she said.

U.S. banks have been pulling back after a post-crisis crackdown on risky lending. As part of the increased oversight, banking regulators issued fresh lending guidelines in 2013 aimed at tightening underwriting standards.

As the business gets picked up by lenders that don’t have the same level of oversight, it’s raised concern that underwriting standards could slip further.

“We are seeing some activities migrate into the shadow banking system to escape prudent capital, liquidity, or risk management standards,” Thomas Curry, the U.S. Comptroller of the Currency and one of the regulators that set the lending guidelines, said in an e-mailed statement. “Regulators should pay close attention to the movement of risk throughout the entire financial-services industry.”

Shadow banks are firms that act like lenders but don’t have depositors, federal bank regulations or access to the Federal Reserve’s discount window, where banks can borrow when money is tight.

“Do we want pensioners in Canada taking risk? Well, if they leave all their money in bank deposits and Canadian government bonds, they’ll be very safe but they won’t make very much,” said Darrell Duffie, a Canadian economist at California’s Stanford University. “The question is, how much of these leveraged loans and other risky assets the pension funds take.”