U.S. "shadow banks" have reached $15 trillion to $25 trillion in size and are a growing part of overall lending, according to a new report from the International Monetary Fund.

In its latest Global Financial Stability Report, the IMF reports that the shadow banking system is roughly equivalent to the traditional banking system in terms of size and risk. Shadow banking is defined in different ways but generally refers to financial institutions outside of banks insured and regulated by the government, such as money market mutual funds, hedge funds and other non-bank financial firms.

The report includes a new accounting of total shadow banking liabilities undertaken by the Financial Stability Board, an international body that coordinates regulators.

The report says shadow banking can "complement" traditional banking and allow credit to flow places it otherwise wouldn't, but also cautions that the size of the market could present difficulties to regulators trying to prevent panics like the one that threatened to bring down the economy in 2008, which itself was partly caused by failures among shadow banks, such as the Reserve Primary Fund, a large money market mutual fund that nearly failed in the fall of 2008.

Whether the rise of shadow banking implies an "overall increase or decline in systemic risk is difficult to assess at this juncture — but there are some indications of increased market and liquidity risk in advanced economies," the report concludes.

In the wake of the financial crisis, Congress passed the 2010 Dodd-Frank financial regulation reform law to prevent future bank failures that would lead to taxpayer bailouts. In recent months, however, regulators such as Treasury Secretary Jack Lew have acknowledged that they may need further regulatory tools to address risks taken on by shadow banking businesses.

But shadow banking is largely driven by the desire to avoid regulation.

"Shadow banking tends to take off when strict banking regulations are in place, which leads to circumvention of regulations," Gaston Gelos, chief of the Global Financial Analysis Division at the IMF, said in a note introducing the report.

The report also warns that "some of the fastest-growing shadow banking activities substitute for, rather than complement, traditional banking."

And it calls for a "more encompassing approach to regulation and supervision that focuses both activities and on entities and places greater emphasis on systemic risk ... and improved transparency.”