FSB reports on global trends and risks in non-bank financial intermediation
20 December 2022
It describes broad trends in financial intermediation across 29 jurisdictions that account for approximately 80% of global GDP, before narrowing its focus to the subset of NBFI activities that may be more likely to give rise to vulnerabilities.
The Financial Stability Board (FSB) today published the Global Monitoring Report on Non-Bank Financial Intermediation 2022.
The report presents the FSB’s annual monitoring exercise assessing
global trends and risks in non-bank financial intermediation (NBFI).
The report mainly covers developments in 2021, when most economies
experienced a better than expected recovery from the COVID-19 shock, in
many ways because of the extraordinary steps taken by official sector
authorities to support key financial markets and the real economy. It
describes broad trends in financial intermediation across 29
jurisdictions that account for approximately 80% of global GDP, before
narrowing its focus to the subset of NBFI activities that may be more
likely to give rise to vulnerabilities. The main findings from this
year’s monitoring exercise include:
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The NBFI sector exhibited strong growth in 2021, driven in particular
by investment funds. These benefited from the economic recovery and
experienced both inflows and higher valuations of a wide range of their
investments. The NBFI sector grew by 8.9%, and its share of total
financial assets remained stable at 49%.
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The narrow measure of the NBFI sector – comprising entities that
authorities have assessed as being involved in credit intermediation
activities that may pose bank-like financial stability risks – reached
$67.8 trillion in 2021, representing 28.3% of total NBFI assets and
14.1% of total global financial assets. Collective investment vehicles
with features making them susceptible to runs remained by far the
largest component of the narrow measure, and their aggregate measures of
credit intermediation, liquidity and maturity transformation remained
at elevated levels.
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Since 2013, NBFI sector linkages with the banking sector through
funding and exposures have continued to decrease. However, the sector
continued to be a net provider of cash in the repo market and its net
level of repo assets rebounded strongly in 2021.
Global economic and financial conditions have deteriorated
significantly since the beginning of 2022, with knock-on effects on the
NBFI sector, and Box 1-1 of the report provides some detail on the NBFI
entities most sensitive to these developments. As part of its work
programme to enhance the resilience of the NBFI sector, the FSB has
identified key amplifiers of liquidity stress and will continue to
develop metrics and tools to monitor associated vulnerabilities.
FSB
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