FIN.

FSB reports on non-bank financial intermediation

The FSB has published the results of its global monitoring exercise in which it assesses risks and trends from non-bank financial intermediation (NBFI). The annual exercise, which includes data from 29 jurisdictions, aims to enhance the resilience of NBFI.

The 2019 report found that:

  • Global financial assets totalled $378.9 trillion in 2018 (1.4% growth). This growth was mostly driven by banks, whose assets increased by 2.8% whereas assets of pension funds and insurance corporations remained largely unchanged. Assets of Other Financial Intermediaries (OFIs) decreased slightly as a result of stock market declines in late 2018;
  • The narrow measure of NBFI increased to $50.9 trillion in 2018 (1.7% growth) and now represents 13.6% of total global financial assets, though the report notes that this growth was significantly slower than the 2012-2017 average annual growth rate of 8.5%. The report also found that collective investment vehicles with features that make them susceptible to runs grew by 0.4% in 2018. Such collective investment vehicles represented 72% of the narrow measure at the end of 2018;
  • Lending by OFIs is increasing, though banks remain the single biggest source of credit intermediation. OFI lending assets grew by 3% in 2018, mostly driven by the euro area, whilst bank loans grew by 5.9%; and
  • Interconnectedness between banks and OFIs through credit and funding relationships remains largely unchanged, with investment funds and money market funds (MMFs) remaining the largest OFI credit providers to banks.

 

Emma Radmore