Understanding a Structural Shift in Global Finance
Over the past fifteen years, global finance has undergone a profound transformation.
Credit and liquidity creation have migrated from banks to markets, giving rise to a new ecosystem of Non-Bank Financial Intermediaries (NBFIs) — including investment funds, insurers, pension systems, and private-credit managers.
This structural change has broadened access to funding and deepened capital markets, but it has also multiplied the channels through which liquidity shocks, leverage, and valuation swings spread across the financial system.
Today, NBFIs manage over USD 200 trillion — nearly half of all global financial assets. Their scale makes them systemic actors whose behaviors influence market liquidity, monetary transmission, and cross-border financial stability.
About the Report
Capital Markets and Financial Risks of Non-Bank Financial Intermediaries is part of the Bank & Finance Deep-Dive Series (2023 – 2025), a multi-year program analyzing how interconnected layers of global finance shape systemic resilience.
The report draws on data from the Financial Stability Board (FSB), International Monetary Fund (IMF), Bank for International Settlements (BIS), and IOSCO, combining quantitative evidence with the Bank & Finance Five-Layer Financial Ecosystem Framework.
Key Findings
- Market-based finance has overtaken banking as the dominant form of global intermediation.
- Liquidity mismatches and leverage cycles—not credit losses—now drive systemic risk.
- NBFIs transmit shocks across borders, linking asset prices, exchange rates, and household wealth.
- Regulation remains fragmented, with large gaps in leverage data, liquidity management, and cross-border supervision.
- A global macro-prudential framework is emerging, led by the FSB – IMF – IOSCO coordination agenda.
Policy Roadmap: From Surveillance to Resilience
The report proposes a graduated macro-prudential toolkit for market-based finance, moving from micro-containment to system-wide stabilization.
It identifies five complementary pillars:
- Liquidity-management tools – swing pricing, redemption gates, and notice periods to curb run-like behavior in open-ended funds.
- Leverage and margin controls – counter-cyclical haircuts and dynamic leverage limits to dampen pro-cyclicality.
- Systemic liquidity backstops – market-maker or repo facilities accessible to eligible NBFIs.
- Cross-border coordination – supervisory colleges and joint stress-testing exercises.
- Integration with monetary and fiscal policy – ensuring that market interventions complement macroeconomic objectives.
These measures, illustrated in Figure 18 – Expansion of Macro-Prudential Coverage (2009–2024), trace how global reforms since the 2008 crisis have progressively widened the prudential perimeter — from G20 mandates to the 2024 FSB-IMF system-wide stress-testing pilot.
Why This Matters
- Post-crisis reforms made banks safer, but left market-based finance under-regulated.
Recent episodes—the March 2020 “dash for cash” and the 2022 UK LDI crisis—proved that even when banks are sound, systemic liquidity can evaporate. - Embedding NBFIs within prudential and macro-financial frameworks is now the next frontier of global financial-stability policy.
- For policymakers and investors, this report offers:
- A comprehensive data map of the NBFI ecosystem;
- A stress-testing architecture linking banks, funds, and infrastructures; and
- A three-phase roadmap (2025–2030) toward full integration of NBFIs into global oversight.
Part of the Bank & Finance Deep-Dive Series (2023–2025)
This publication complements prior studies on Sovereign Debt & Global Financial Stability, Cyber Resilience in Finance, Climate Change & Financial Risks, and Financial Geopolitics & Fragmentation.
Together, the series builds a coherent architecture for understanding the global financial ecosystem through five interdependent layers: Information, Infrastructure, Innovation, Integration, and Governance.
Download the Full Report
Capital Markets and Financial Risks of Non-Bank Financial Intermediaries (NBFIs)
A Deep-Dive Report by Bank & Finance Consulting Group
Date: October 2025 | Author: Bank & Finance Consulting Group
Keywords: Non-Bank Financial Intermediaries (NBFIs), Capital Markets, Financial Stability, Macro-Prudential Policy, Systemic Risk, FSB, IMF, IOSCO
