Non-bank financial intermediation rose to 256.8 billion dollars (219.5 billion euros) in 2024, 9.4% more than in 2023 and double the increase in the financial sector (+4.7%), it was announced today.
The Financial Stability Board (FSB) published this Tuesday, 16th, the annual monitoring report on non-bank financial intermediation, carried out by high-risk investment funds, money markets, pensions, trust companies and insurance companies, for example.
The report outlines trends in non-bank financial intermediation in 2024 across 29 jurisdictions representing 90% of global Gross Domestic Product (GDP).
Non-bank financial intermediation represents a 51% share of total global financial assets.
“Growth reflects a rising appetite for risk at a time of rising asset prices and low interest rates,” according to the Financial Stability Board, based in the Swiss city of Basel.
This supervisory body, created in 2009 to preserve international financial stability after the global financial crisis, states that all subsectors of non-bank financial intermediation grew in 2024.
High-risk money market funds, other investment funds, trust companies and structured financial vehicles grew the most to 169.4 billion dollars (145 billion euros) in 2024, 11% more than in the previous year.
The assets of pension funds and insurance companies grew in 2024, respectively, 7% and 6%.
Entities that carry out credit intermediation and may pose risks to stability similar to those of banks increased by 12%, to 76.3 billion dollars (65.2 billion euros).
Some of them, such as financial companies, stock exchange agents and structured financing vehicles, have high levels of leverage (debt to invest).
The Financial Stability Board warns that there are “severe limitations on the availability of data for private credit in statistical and regulatory reports.”
Analyzing the impact of private assets on financial stability will be an important part of the Financial Stability Board’s oversight work over the next year.
This body created a system for observing the evolution of the non-banking financial sector, what was previously called parallel banking, at the request of the G20 countries at the 2010 Seoul Summit.