Featured Product

    FSB Report Examines Global Nonbank Financial Intermediation Activity

    January 19, 2020

    FSB published the ninth annual report examining the global non-bank financial intermediation activity. The report presents global trends and risks from non-bank financial intermediation. It compares the size and trends of financial sectors, in aggregate and, across jurisdictions, primarily using the sectoral balance sheet data. The report covers data till the end of 2018 from 29 jurisdictions, which together represent over 80% of the global Gross Domestic Product. FSB focuses on the parts of non-bank financial intermediation that may pose bank-like financial stability risks and/or regulatory arbitrage (that is, the narrow measure of non-bank financial intermediation).

    In addition to examining the trends and risks in global non-bank financial intermediation, the report assesses the interconnectedness among financial entities, both within and across borders. The report features case studies that discuss different aspects of non-bank financial intermediation in greater detail. They include flow and valuation effects in the investment fund sector, the role of non-bank financial institutions in providing financing to commercial real estate, and the role of investment funds in cross-border capital flows. The main findings from the 2019 monitoring exercise include the following:

    • Total global financial assets grew by 1.4% to USD 378.9 trillion in 2018, driven largely by banks. Assets of insurance corporations and pension funds remained largely unchanged, while those of other financial intermediaries declined marginally as a result of stock market declines in late 2018 and, to a lesser extent, outflows from some of these entities. Other financial intermediaries include all financial institutions that are not central banks, banks, insurance corporations, pension funds, public financial institutions, or financial auxiliaries.
    • The narrow measure of non-bank financial intermediation grew by 1.7%, to USD 50.9 trillion in 2018, significantly slower than the 2012-17 average annual growth rate of 8.5%. It now represents 13.6% of the total global financial assets. Entities engaged in securitization-based credit intermediation, such as securitization vehicles, remained unchanged in terms of nominal value in 2018, representing 9.3% of the narrow measure. Collective investment vehicles with features that make them susceptible to runs grew by 0.4% in 2018, much slower than the 11% average annual growth rate from 2012-17. At the end of 2018, such collective investment vehicles represented 72% of the narrow measure. 
    • Lending by other financial intermediaries continued to grow and their lending assets grew by 3.0% in 2018, largely driven by the euro area. However, banks remain the single largest source of credit intermediation.
    • Interconnectedness between banks and other financial intermediaries through credit and funding relationships remains largely unchanged since 2016. Investment funds and money market funds remain the largest other financial intermediary providers of credit to banks.

     

    Related Links

    Keywords: International, Banking, Insurance, Pensions, Securities, Shadow Banking, Financial Stability, NBFI, FSB

    Related Articles
    News

    PRA Finalizes Supervisory Approach for Non-Systemic Banks in UK

    PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.

    April 15, 2021 WebPage Regulatory News
    News

    EBA Finalizes Standards on Methods of Prudential Consolidation

    EBA published a report that sets out the final draft regulatory technical standards specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR).

    April 15, 2021 WebPage Regulatory News
    News

    EBA Updates List of Other Systemically Important Institutions in EU

    EBA updated the list of other systemically important institutions (O-SIIs) in EU.

    April 15, 2021 WebPage Regulatory News
    News

    BCBS Report Concludes Basel Risk Categories Can Capture Climate Risks

    BCBS published two reports that discuss transmission channels of climate-related risks to the banking system and the measurement methodologies of climate-related financial risks.

    April 14, 2021 WebPage Regulatory News
    News

    UK Authorities Welcome FSB Review of their Remuneration Regime

    UK Authorities (FCA and PRA) welcomed the findings of FSB peer review on the implementation of financial sector remuneration reforms in the UK.

    April 14, 2021 WebPage Regulatory News
    News

    PRA and FCA Letter on Addressing Risks from Use of Deposit Aggregators

    PRA and FCA jointly issued a letter that highlights risks associated with the increasing volumes of deposits that are placed with banks and building societies via deposit aggregators and how to mitigate these risks.

    April 14, 2021 WebPage Regulatory News
    News

    MFSA to Amend Banking Act and Rules in Coming Months to Transpose CRD5

    MFSA announced that amendments to the Banking Act, Subsidiary Legislation, and Banking Rules will be issued in the coming months, to transpose the Capital Requirements Directive (CRD5) into the national regulatory framework.

    April 14, 2021 WebPage Regulatory News
    News

    EC Delegated Regulation on Specialized Lending Exposures Under CRR

    EC finalized the Delegated Regulation 2021/598 that supplements the Capital Requirements Regulation (CRR or 575/2013) and lays out the regulatory technical standards for assigning risk-weights to specialized lending exposures.

    April 14, 2021 WebPage Regulatory News
    News

    OSFI Proposes to Enhance Assurance Expectations for Basel Returns

    OSFI launched a consultation to explore ways to enhance the OSFI assurance over capital, leverage, and liquidity returns for banks and insurers, given the increasing complexity arising from the evolving regulatory reporting framework due to IFRS 17 (Insurance Contracts) standard and Basel III reforms.

    April 13, 2021 WebPage Regulatory News
    News

    ECB Issues Results of Benchmarking Analysis of Recovery Plans of Banks

    ECB published results of the benchmarking analysis of the recovery plan cycle for 2019.

    April 13, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6858