Enhancing the Resilience of Non-Bank Financial Intermediation
Financial Stability Board
November 10, 2022
This report describes progress over the past year and planned work by the FSB, as well as by standard-setting bodies (SSBs) and other international organisations, to enhance the resilience of non-bank financial intermediation (NBFI).
Conjunctural factors and structural changes in the global financial system over the past decade have increased the reliance on market-based intermediation. NBFI has grown considerably – to almost half of global financial assets, compared to 42% in 2008 – and become more diverse. As a result, the importance of NBFI for the real economy has increased and continues to grow.
To enhance the resilience of liquidity supply in stress, individual authorities may wish to explore: ways to increase the availability and use of central clearing for government bond cash and repo transactions; the use of all-to-all trading platforms; and measures to enhance the transparency of bond and repo markets. In addition, the report proposes a number of policy measures that seek to reduce [Emerging Market Economy] vulnerabilities stemming from external funding and non-bank financing, as well as to enhance their crisis management tools. The FSB and IOSCO will carry out work to enhance the functioning and resilience of short-term funding markets, and will also consider additional work in due course to enhance resilience of liquidity provision in core bond markets.
The full report is available at https://www.fsb.org/wp-content/uploads/P101122.pdf