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.