“Sense and Sensibility” in nonbank regulation: a thoughtful approach to nonbank financial regulation

28 January 2026

Speech by John Schindler at a seminar hosted by Volatility and Risk Institute and Center for Global Economy and Business, Stern School of Business, New York University.

The views expressed in these remarks are those of the speaker in his role as FSB Secretary General and do not necessarily reflect those of the FSB or its members.

Good afternoon everybody. Thanks, Professor Berner, for your kind invitation, it is a pleasure to be here with you today. 

I would like to speak about the importance of a resilient nonbank financial sector for global financial stability and the challenges regulators face in working toward that goal. To do that, I’m going to get some assistance from Jane Austen.

If you follow me on LinkedIn, you know that I’m fond of writing about the books that I’m reading, and I recently finished Jane Austen’s Sense and Sensibility. If you’ve read Austen, you know that she frequently writes about the relationships of young women. Those relationships are complex – there are often multiple suitors – and they aren’t always stable – presumed engagements end without warning. Patience, and sometimes outside interventions, can help lead to the desired outcome. In Sense and Sensibility, we have Marianne and Elinor, both seeking husbands. We root for them as outside events lead them both to lose the relationships they presume are secure.

Is the nonbank sector really so different? Its complex and the relationships are myriad and, unfortunately, not always stable. So, as I reflect today on the complexities of the non-bank sector and the challenges that we face in regulating it, I will start with a quote from Sense and Sensibility, where Elinor says of Marianne: “A few years, however, will settle her opinions on the reasonable basis of common sense and observation.” 

Regulators have had a few years to observe the nonbank sector and the roles it’s played in periods of financial stability and periods of turmoil. Our opinions are becoming settled (and I hope they’re based on common sense). And the opinion is that the nonbank sector is an essential component of the global financial system and its resilience is, therefore, critical.

Based on this opinion, then, our challenge is to act decisively and thoughtfully to ensure that the activities of this sector do not undermine the resilience of the global financial system.

Today, I will share thoughts in three areas:

  1. The importance of not misusing the term “nonbank.”
  2. The growing significance of nonbanks in the financial system and their role in recent periods of market turmoil.
  3. How the sector should be regulated for financial stability and some misconceptions surrounding that regulation.

Let me begin by unpacking the terminology itself.

Avoiding misuse of the term “nonbank”

When financial stability became a higher priority after the Global Financial Crisis (GFC), we called the nonbank sector “shadow banking.” That term carried a pejorative connotation, so, after a while we switched to the more descriptive term “nonbank financial intermediation” or NBFI for short. While the term NBFI served as a useful shorthand to describe a diverse and dynamic sector, the use of that term is most fitting when we are discussing the broad contours of this vastly diverse set of institutions and activities. (That is how I will use the term today.) As regulators, however, we sometimes misuse the term. Referring to NBFI as if it was a monolithic entity can be misleading and can actually hamper discussion of key issues, especially when we’re actually concerned about vulnerabilities in specific subsectors or activities. 

NBFI encompasses a vast array of entities and activities, each with its own unique characteristics, contributions, and vulnerabilities to the financial system. From money market funds (MMFs) and hedge funds to pension funds, insurance companies, broker dealers, commodity trading firms, and fintech firms, the sector is anything but homogeneous. These entities utilise different business models, perform distinct functions, and present varied risks to financial stability.

Using a single term like “NBFI” oversimplifies this complexity and it can lead to the misconception that the same vulnerabilities are uniformly distributed across the sector, which would in some cases over-play and, in others, under-play the associated financial stability risks.

For example, when the FSB was working to understand the financial stability implications of NBFI leverage, nonbanks that generally don’t use significant leverage, like money market funds (MMFs) and some insurance companies and pension funds, were worried that they were being lumped in with those that do, like some hedge funds. Our engagement was hampered by this anxiety. As our work matured, we examined the constituent entities and activities of NBFI in more detail. We analysed their behaviour during periods of stress. Thus, we could better identify potential threats to financial stability and develop tailored policy responses.

If we want to be effective as regulators, the use of precise terminology is not pedantry – it is essential. So, for example, when we set up a task force to look at nonbank data issues, we first homed in on leveraged trading strategies in sovereign bond markets and then decided we needed to be more specific and narrowed our focus to hedge funds.

The importance of nonbanks in the financial system

The nonbank sector has grown in size, complexity, and importance since the GFC. According to the FSB’s annual Global Monitoring Report on NBFI, as of 2024, nonbanks accounted for just over half of total global financial assets, amounting to approximately a quarter of a quadrillion dollars ($260 trillion). This growth has been driven by factors, including regulatory shifts, the global search for yield, and innovation.

Beyond the numbers, nonbanks play a crucial role in the financial ecosystem by providing a myriad of critical financial services and activities in addition to being a valuable alternative to traditional bank funding. This alternative financing is essential for supporting real economic activity, particularly in underserved sectors or markets, helping to bridge the financing gap that can exist when banks are unable or unwilling to lend. Moreover, by offering different types of financial products and services, nonbank entities reduce the concentration of risk within the banking sector, enhancing the resilience of the financial system. This diversification may be particularly important during economic downturns when banks may tighten their lending standards. Nonbank entities also foster healthy competition within the financial sector. This competition can lead to better pricing, improved services, and more innovative financial products for consumers and businesses alike. The presence of nonbank lenders encourages banks to enhance their offerings and remain competitive, which ultimately benefits the overall economy. 

While the growth of the nonbank sector has brought undeniable benefits, such as increased access to credit and diversified funding sources, it has also introduced systemic risks. To go back to Sense and Sensibility again, Elinor is speaking about her sister’s suitors and says, “I have not wanted syllables where activities have spoken so plainly.” In recent years, the activities of nonbanks have, indeed, spoken plainly and have provided stark reminders of the negative externalities that can arise when that sector is not resilient.

For example, during the onset of the COVID-19 pandemic, some investment funds and money market funds faced significant liquidity pressures, as investors sought to redeem their holdings amid the heightened uncertainty. These redemptions led to significant asset sales and created a negative feedback loop, amplifying stress in short-term funding markets and, in some cases, necessitating central bank intervention.1

During this episode, margin calls on leveraged positions created a spike in the demand for liquidity. While increases in margin requirements are to be expected in volatile markets, extremely high asset price volatility and large trading volumes led to significant increases in initial margin and variation margin flows. Caught off guard by the size and timing of these increases, some market participants were forced to utilise their cash buffers or obtain further funding to meet those margin requirements.

Leverage also played a significant role in the dash for cash during this period. One way to obtain leverage is through repo markets. As our upcoming report on repo markets outlines, this leverage is often very short-term and can be withdrawn quickly, and some repo arrangements have no haircuts, which allows a significant build-up of risk.

In the commodity market turmoil following the Russian invasion of Ukraine, commodity prices and volatility surged. This volatility led to a spike in margin calls on commodities derivatives contracts, particularly in Europe, resulting in an increased demand for liquidity to meet those calls and the emergence of liquidity strains in some markets.

Those first two examples followed external, non-financial shocks. The collapse of Archegos in March 2021 and the gilt market turmoil in September 2022 did not. The rapid unwinding of Archegos’s positions created significant market volatility, and following the default of the firm, dealer banks liquidated their derivatives positions, including through forced sales of stocks, resulting in significant losses for counterparty banks. The collapse of Archegos had significant spillover effects on financial markets and highlighted how leverage and concentrated exposures in nonbanks can lead to significant losses for counterparties and ripple effects across the financial system. It also raised concerns about the adequacy of risk management practices among prime brokers.

During the turmoil in the UK gilt market in September 2022, an abrupt rise in gilt yields led to a sharp, sudden increase in liquidity demand from liability-driven investment (LDI) funds. In response, LDI funds sought to rebalance their portfolios, either by selling other liquid assets or requesting additional capital from pension fund investors. While some LDI funds managed to execute this rebalancing, others struggled to secure the necessary funds quickly enough due to the rapid yield movements and operational constraints. LDI funds offloaded long-dated gilts in a very short time frame and the resulting rapid increase in yields created significant challenges for pension funds, as their liabilities were often tied to fixed-income investments. This situation required intervention from the Bank of England, which stepped in to stabilise the market and to restore liquidity.2

The message of these episodes is that NBFI has become so important to the financial system that we need to ensure its resilience, so let me turn to regulation and how the nonbank sector should be regulated.

Views and misconceptions on nonbank regulation

Banks and nonbanks are both part of the financial system, and both must be resilient to a wide range of financial and nonfinancial shocks to ensure stability. The financial risks of nonbanks are as varied as you would suspect given the heterogeneity of firms and activities that fall within this heading. As a result, the risk to financial stability from banks and nonbanks also differ both in aggregate and when we look at specific nonbank entities and activities. Risk-taking is a natural and necessary part of financial intermediation. However, if these risks are poorly managed or insufficiently regulated, they can have destabilising effects on the broader financial system. The interconnectedness of nonbanks with other market participants means that their vulnerabilities can propagate, amplifying shocks and creating systemic risks.

Historically, the regulation of the nonbank sector has focused more on investor protection or market integrity or other similar mandates. However, these mandates do not fully capture the systemic nature of risks that the sector can pose to the global financial system, which has grown as this sector has grown. The negative externalities that can arise from non-bank activities, for example, during times of stress like the examples I gave earlier, suggest that a financial stability perspective is necessary. This perspective requires us to consider not just the risks to individual investors or markets, but also the potential for systemic risks – risks that can have far-reaching implications for the global financial system and the global economy.

Here, I turn again to Sense and Sensibility. As Marianne’s mother debates what caused the questionable behaviour of Marianne’s suitor, she asks, “I wonder whether it is so. I would give anything to know the truth of it.” This brings me to the question that often arises in discussions about NBFI in light of their role in periods of financial turmoil: Should nonbanks be regulated like banks? The answer, in my view, is both yes and no.

The argument for regulating nonbanks like banks

There are instances where the vulnerabilities in nonbanks mirror those in banks, warranting the use of similar regulatory tools. For example, the need for liquidity or capital is not unique to banks and they can be essential for preserving financial stability. The FSB’s work on MMFs has emphasised the importance of liquidity management to prevent runs.3 Similarly, other work was meant to ensure that market participants have appropriate liquidity for margin and collateral calls during periods of stress. These measures were put in place because these bank-like rules were appropriate in order to ensure that the critical financial intermediation undertaken by nonbanks is resistant to shocks.

Another reason for bank-like regulation of nonbanks results from the need for central banks to intervene during some recent episodes of stress. This need to intervene reflects that difficulties at nonbanks can have repercussions beyond the immediate investors in nonbank products and services that may threaten financial stability. Further, some jurisdictions have either implemented or are considering the introduction of central bank liquidity backstops specifically designed for nonbanks. These developments strengthen the case for regulating nonbanks like banks, at least in some cases.

The argument for regulating nonbanks differently

However, it would be a mistake to blindly apply bank-like regulations to nonbanks. The two sectors have different business models and risk profiles, and regulation must reflect these differences. For example, while banks take deposits that can be redeemed on demand at par value, nonbanks often deal with investors who have different risk-return characteristics and liquidity profiles. Indeed, MMFs, open-ended funds (OEFs), hedge funds and other nonbanks each present unique challenges that require tailored regulatory approaches, which may involve entity-level and activity-level measures. The diversity I emphasised before screams out for different regulation. It is not one size fits all.

I think this is obvious, so why do I bring it up? Repeatedly, in FSB outreach events and consultations, we come across misconceptions about how regulators like the FSB and its membership think about nonbank regulation. Let me offer some examples.

One prevalent misconception is that imposing bank-like regulations on nonbanks represents a failure to recognise the important financial roles they play. During our consultations on MMFs, some stakeholders argued that stricter liquidity requirements could reduce the appeal of these funds as an investment vehicle. During our leverage consultation, respondents argued that overly broad policies could discourage investment in regulated funds, potentially driving capital to less-regulated, higher risk channels and undermining rather than supporting financial stability. Others expressed concerns that regulatory measures could limit financial institutions’ ability to provide financing to underserved markets. They suggested that associated costs and barriers created by these regulations might discourage institutions from engaging in necessary lending activities, ultimately reducing access to capital for those who need it most and potentially harming overall market stability.

To this, I would say it is not that we fail to recognise the importance of these activities. The points raised in consultation are valid and deserve consideration, but they must be balanced against the systemic risks that can arise when vulnerabilities in nonbanks go unaddressed.

The need for regulation arises precisely because nonbanks are so integral to the financial system. Their size, interconnectedness, and critical role in providing credit, liquidity, and investment opportunities mean that their activities can have far-reaching implications for financial stability. Disruption in nonbanks and the associated impairment of the financial and credit intermediation provided by nonbanks will hit the real economy. Appropriate oversight is not about stifling innovation or imposing unnecessary burdens; it is about ensuring that nonbanks can operate safely and effectively within a resilient financial system.

Another misconception is that regulators believe all nonbanks present significant risks to financial stability. This is not the case. The nonbank sector is incredibly diverse, encompassing entities with vastly different business models, risk profiles, and regulatory needs. While some entities or activities, such as highly leveraged hedge funds that operate in critical markets, like sovereign bond markets, may pose significant risks to financial stability, others, such as well-managed pension funds or insurance companies, may present only limited risks to financial stability. Effective regulation should adopt a risk-based approach that focuses on areas where vulnerabilities are most pronounced and on the specific risks of different nonbank entities and activities.

During our consultation on nonbank leverage, respondents emphasised this diversity. They noted that different nonbanks employ leverage in varying ways, resulting in different levels of risk. Some stakeholders emphasised that leverage in certain segments, such as real estate investment trusts, is often well-managed and supported by robust risk management practices. The FSB recommendations give jurisdictions the ability to cater the recommendations to the specificities of the nonbank sector in their jurisdiction. Despite clear language about this flexibility to account for the diversity, we frequently heard the lament that all nonbank activities would be treated the same. Doing so, however, would hurt the financial system.

The final misconception that I want to mention is that the lack of depositors for nonbanks (or conversely, the presence of sophisticated investors) means that bank-like regulation should not apply. This argument suggests banks are subject to strict oversight only because they take deposits that are redeemable on demand and at par value. This unique characteristic of bank liabilities creates an inherent fragility, necessitating robust regulatory frameworks to ensure banks maintain sufficient liquidity and capital to meet their obligations. Additionally, banks’ access to central bank liquidity as lenders of last resort underscores the need for regulation to mitigate moral hazard and safeguard financial stability.

On the other hand, MMFs are close substitutes for deposits because they offer investors daily liquidity and stable value. When MMFs experience runs, financial market effects can be felt far beyond the investors in the MMF itself. As such, they require regulatory measures to address liquidity risks and prevent runs. OEFs are further removed from the characteristics of deposits, and investments in private credit, equity, and hedge funds are even further away. It is not about depositors versus investors. When you take the financial stability perspective, it’s about the resilience of the financial system as a whole. This does not mean that these entities should not be regulated; rather, it means that their regulation should reflect the specific risks they pose to the financial system.

The path forward: enhancing resilience in NBFI

As I start to wrap up, let me turn to Sense and Sensibility again. While considering the situation that she and her daughters find themselves in and wanting to improve it, Marianne and Elinor’s mother says, “I shall see how much I am before-hand with the world in the spring, and we will plan our improvements accordingly.” As regulators, we see the financial landscape and the important role that nonbanks play, and we have to plan our improvements accordingly to ensure that the nonbank sector has the resilience it needs. The FSB has focused on several areas of work: 

  1. Enhancing liquidity resilience
    Following the market turmoil of March 2020, the FSB emphasised the need to address liquidity mismatches in nonbanks. This has underpinned our work on MMFs and OEFs, and we are currently exploring measures to improve resilience in these areas. 
  1. Addressing leverage risks
    The use of leverage in the nonbank sector can amplify market shocks and create systemic risks. We made recommendations in this area last year, and we are pursuing data gaps and further work on some of those recommendations.
  1. Improving risk management practices
    Events like the collapse of Archegos highlighted gaps in risk management practices among nonbank entities and their counterparties. Strengthening these practices is essential to reducing vulnerabilities. 
  1. Promoting transparency and data sharing
    A lack of transparency can exacerbate uncertainty during periods of stress. The FSB is working to improve data collection and data and information sharing to enhance the understanding of risks within the nonbank sector. 
  1. Fostering International Cooperation
    Given the global nature of financial markets, international cooperation is essential. The FSB is committed to working with its members and other stakeholders to develop harmonised regulatory approaches that address cross-border risks. 

Conclusion

Before I conclude, as I am at one of the world’s premier research institutions, let me send a message to the researchers in the room. There are several misconceptions within the discourse surrounding the regulation of nonbank financial intermediation. We welcome all comments and insights from the public, and there are numerous claims being made that warrant further exploration. If you are seeking research topics, there is a significant opportunity for rigorous analytical work that could substantiate or challenge these claims. For the grad students out there, the breadth of these topics could provide ample material for years’ worth of future doctoral dissertations.

To conclude, the nonbank sector is a critical part of the global financial system. Its size, complexity, and interconnectedness make it both a source of strength and a potential point of vulnerability. As we continue to navigate the challenges and opportunities presented by NBFI, it is important that we remember that effective regulation is not about stifling innovation or imposing unnecessary burdens. It is about ensuring that the financial system remains resilient, stable, and capable of supporting the real economy. When the resilience of the nonbank sector is called into question, regulators must be quick to act, or to turn to Jane Austen one last time (this time from Emma), “What is right to be done cannot be done too soon.”

Thank you.

  1. FSB (2020), Holistic Review of the March Market Turmoil, November. ↩︎
  2. FSB (2024), Leverage in Nonbank Financial Intermediation: Consultation Report, December. ↩︎
  3. FSB (2021), Policy proposals to enhance money market fund resilience: Final report, October. ↩︎

2025 Resolution Report: “From Plans to Practice: Operationalising Resolution”

21 January 2026 | PDF full text (893 KB)

Effective resolution frameworks, supported by global collaboration, are essential to maintaining financial stability.

This report highlights the FSB’s ongoing efforts to strengthen global resolution frameworks for banks, insurers, and financial market infrastructures.

The report reviews the progress made in 2025, including the publication of a practices paper on transfer tools, the formation of a task force on bail-in execution, and updates to guidance on recovery and resolution planning for insurers. It also provides a summary of results from the resolvability assessments for global systemically important banks (G-SIBs) and central counterparties (CCPs).

Looking ahead, the FSB will focus on addressing challenges identified in recent crises, such as funding in resolution and cross-border bail-in execution, while continuing to monitor and support consistent implementation of global standards and operationalisation of resolution tools across the sectors.

Good Practices for Crisis Management Groups (Revised Version)

| PDF full text (506 KB)

Crisis Management Groups (CMGs) of Global Systemically Important Banks (G-SIBs) have been in place for over 10 years as a core part of the post global financial crisis coordination infrastructure.

This report sets out good practices that have helped CMGs to enhance their preparedness for the management and resolution of a cross-border financial crisis affecting a global systemically important bank (G-SIB) as per the FSB Key Attributes. It draws on a stocktake carried out by the FSB in 2020 and CMG members’ experience during the COVID-19 pandemic.

The focus is on CMG activities that seek to enhance crisis preparedness rather than on cooperation in actual crisis. The good practices identified in this report are organised along 16 desired outcomes that CMGs seek to achieve and relate to:

What our good practices for Crisis Management Groups cover
  1. the structure and operation of CMGs;
  2. resolution policy, strategy and resolvability assessments;
  3. coordination on enhancing firm’s resolvability; and
  4. enhancing home-host coordination arrangements for crisis preparedness.  

A shared understanding of these practices can help lean against fragmented approaches and help to enhance the effectiveness of CMGs. While many of these practices have been well established, others are emerging or developing.

As CMGs continue to evolve, the FSB will continue to monitor the development of their practices and consider any future work to promote consistency and effective operation of CMGs.

FSB outlines further work to make resolution frameworks operational

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Ref: 1/2026

  • Annual Resolution Report highlights the FSB’s ongoing efforts to strengthen the global resolution regimes for banks, insurers and financial market infrastructures.
  • The FSB will undertake further work to support members addressing critical challenges, such as funding in resolution and effective bail-in execution, particularly in cross-border contexts.
  • The FSB is planning to launch a strategic review of its crisis preparedness activities to ensure that they remain well aligned with emerging risks and changes in the financial sector.

The Financial Stability Board (FSB) today published its 2025 Resolution Report, which reviews global progress in implementing resolution reforms and enhancing crisis preparedness across the financial sector. The report also sets out the FSB’s priorities for 2026 to advance the operationalisation of resolution frameworks.

Foundational resolution frameworks are now mostly in place, with significant progress in operational planning and resolvability assessments.

In 2025, the FSB focused on supporting resolution authorities’ operational readiness by publishing a practices paper on transfer tools, which shares insights and draws lessons from past resolution cases. The FSB also supported knowledge sharing on funding in resolution and advanced work on bail-in execution by forming a dedicated task force. Additionally, the FSB published draft guidance to promote consistency in determining which insurers should be subject to recovery and resolution planning requirements.

Dominique Laboureix, Chair of the Single Resolution Board, and Chair of the FSB Resolution Steering Group, said “This Resolution Report highlights the progress achieved in 2025 in enhancing crisis readiness across banks, insurers and CCPs. In 2026, we will build on this momentum, focusing on removing remaining challenges to cross-border bail-in execution and funding in resolution, and advancing cross-sector information sharing and collaboration to further strengthen global financial stability.”

Looking ahead, the FSB plans to conduct a peer review on public sector backstop funding mechanisms and to publish a practices paper on funding in resolution to further support operational planning. The FSB is also planning to launch a strategic review of its crisis preparedness activities. The review will aim to ensure the FSB’s crisis preparedness activities reflect emerging vulnerabilities and structural changes in the financial system as well as to strengthen coordination among the FSB and standard-setting bodies with crisis preparedness mandates.

The FSB has also published an update to the Good Practices for Crisis Management Groups, which was first issued in 2021. The supplementary information aims to enhance crisis coordination between home and host authorities outside of crisis management groups.

Notes to editors

The 2025 Resolution Report has been prepared by the FSB Resolution Steering Group, which is the primary global forum for the development of global standards and guidance on resolution regimes and recovery and resolution planning for systemically important financial institutions. ReSG is chaired by Dominique Laboureix, Chair of the Single Resolution Board.

Crisis Management Groups of global systemically important banks (G-SIBs) have been in place for over 10 years as a core part of the post global financial crisis coordination infrastructure. According to the FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions Key Attribute 8, home and key host authorities of all G-SIBs should maintain CMGs to enhance preparedness and facilitate the management and resolution of cross-border financial crises. 

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Andrew Bailey, Governor of the Bank of England. The FSB Secretariat is located in Basel, Switzerland and hosted by the Bank for International Settlements.

FSB Regional Consultative Group for the Americas meets in Bermuda

16 December 2025

The Financial Stability Board (FSB) Regional Consultative Group for the Americas met on 16 December in Bermuda, hosted by the Bermuda Monetary Authority.

The meeting, which brings together senior officials from central banks, financial authorities and regulatory bodies in the region, included a focus on the insurance sector, reflecting Bermuda’s position as a key hub for the industry. A number of private-sector participants were invited to share their perspectives on the role of insurance in addressing climate protection gaps and navigating structural shifts in the global life insurance market.

Members also discussed global and regional financial vulnerabilities, artificial intelligence and its use in finance, and how authorities can support the development of robust frameworks to detect, prevent and recover from cyber-related incidents.

Global Monitoring Report on Nonbank Financial Intermediation 2025

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In 2024, the NBFI sector continued to expand (9.4%), growing at double the pace of the banking sector, with assets that represented 51.0% of total global financial assets. This is the second highest percentage share recorded – similar to pre-pandemic levels.

The comprehensive monitoring of global trends, vulnerabilities, and innovations of the nonbank financial intermediation (NBFI) sector is a key part of the FSB’s ongoing efforts to enhance financial system resilience.

This report describes broad trends in financial intermediation across 29 jurisdictions that account for over 90% of global GDP, before narrowing its focus to the subset of NBFI activities that may be more likely to give rise to vulnerabilities. To complement the monitoring of vulnerabilities, the report also presents information on the availability of policy tools, this year for securitisation activities.

More granular data on other financial institutions’ use of wholesale funding and for finance companies’ loan assets, were collected for the first time in this report.

This year’s report includes a case study on bank-NBFI interconnectedness, which highlights three main forms of linkages:

  • funding and deposit relationships, where non-banks place deposits with banks;
  • lending, repo and other credit exposures from banks to non-banks; and
  • holdings of bank-issued securities by investment funds, insurers and pension funds.

The case study includes quantitative analysis of bank-NBFI interconnectedness by instrument type, and portfolio overlap.

The report also highlights data challenges related to private finance and credit in statistical and regulatory reporting.

FSB reports continued growth in nonbank financial intermediation in 2024 to $256.8 trillion

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Ref: 25/2025

  • The nonbank financial intermediation (NBFI) sector grew at double the pace of the banking sector in 2024.
  • Investment funds, trust companies, hedge funds, and money market funds all recorded significant growth.
  • Report highlights severe limitations in the availability of regulatory data for private credit.

The Financial Stability Board (FSB) today published its annual Global Monitoring Report on Nonbank Financial Intermediation.

The report describes broad trends in nonbank financial intermediation in 2024 across 29 jurisdictions that account for over 90% of global GDP. The main findings from this year’s monitoring exercise include:

  • In 2024, the NBFI sector grew 9.4%, double the pace of the banking sector (4.7%), increasing its share of total global financial assets to 51% ($256.8 trillion), similar to pre-pandemic levels. This growth reflected buoyant risk appetite amidst increasing asset prices and lower policy rates.
  • All NBFI subsectors grew in 2024. Other financial intermediaries – which includes money market funds, hedge funds, other investment funds, trust companies, and structured finance vehicles – was the fastest growing sub-sector, growing by 11% over the year, to $169.4 trillion. Pension fund and insurance corporation assets grew 7% and 6%, respectively.
  • The narrow measure of the NBFI sector – which consists of entities that authorities have assessed as being involved in credit intermediation activities that may pose bank-like financial stability risks – increased 12% to $76.3 trillion. Most vulnerability metrics for entities classified into the narrow measure – measuring credit intermediation, maturity transformation, liquidity transformation, and leverage – remained broadly stable. Fixed income and mixed funds showed high degrees of liquidity transformation, while finance companies, broker-dealers, and structured finance vehicles displayed high levels of leverage.

The Global Monitoring Report also highlights severe limitations in the availability of data for private credit in statistical and regulatory reports. The assessment of private assets’ potential impact on financial stability will be an important part of the overall FSB’s surveillance work in the year ahead. For this report, using proxies and market intelligence, jurisdictions identified a diverse set of non-bank entities engaging in private finance, including private credit funds, but also trust companies, finance companies, structured finance vehicles, insurance corporations, and pension funds.  

Notes to editors

The FSB created a system-wide monitoring framework to track developments in NBFI in response to a G20 Leaders’ request at the Seoul Summit in 2010. The objective of the monitoring exercise is to identify the build-up of vulnerabilities in NBFI and initiate corrective actions where necessary.

Complementing this monitoring, the FSB has been coordinating the development of policies, together with its member standard-setting bodies and international organisations, to mitigate potential vulnerabilities associated with NBFI. Progress under the FSB work programme to enhance resilience in NBFI is detailed in the FSB’s July 2025 report.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Andrew Bailey, Governor of the Bank of England. The FSB Secretariat is located in Basel, Switzerland and hosted by the Bank for International Settlements.

2025 List of Global Systemically Important Banks (G-SIBs)

27 November 2025 | PDF full text (168 KB)

  1. The Financial Stability Board (FSB), in consultation with the Basel Committee on Banking Supervision (BCBS) and national authorities, has identified the 2025 list of global systemically important banks (G-SIBs).1 The list uses end-2024 data,2 and is based on a methodology agreed upon in July 2018 and implemented for the first time in the end-2021 G-SIB assessment.3
  2. The list for 2025 includes 29 G-SIBs, the same banks as in the 2024 list but with different allocation of the banks to buckets (see Annex). The changes in the allocation of the banks to buckets (see below for details), largely reflect the effects of changes in the underlying activity of banks, with the complexity category being the largest contributor to score movements. The higher loss absorbency requirement established with this list will be effective beginning 1 January 2027 if there is a bucket increase.4
  3. FSB member authorities apply the following requirements to G-SIBs:
  • Higher capital buffer: Since the November 2012 update, the G-SIBs have been allocated to buckets corresponding to higher capital buffers that they are required to hold by national authorities in accordance with international standards.5 The capital buffer requirements for the G-SIBs identified in the annual update each November will apply to them as from January fourteen months later.6 The assignment of G-SIBs to the buckets, in the list published today, therefore determines the higher capital buffer requirements that will apply to each G-SIB from 1 January 2027.
  • Total Loss-Absorbing Capacity (TLAC): G-SIBs are required to meet the TLAC standard, alongside the regulatory capital requirements set out in the Basel III framework. The TLAC standard began being phased-in from 1 January 2019.7
  • Resolvability: These requirements include group-wide resolution planning and regular resolvability assessments. The resolvability of each G-SIB is reviewed in the FSB Resolvability Assessment Process (RAP) by senior regulators within the firms’ Crisis Management Groups.8
  • Higher supervisory expectations: These requirements include supervisory expectations for risk management functions, risk data aggregation capabilities, risk governance and internal controls.9
  1. The BCBS publishes the annually updated denominators used to calculate banks’ scores and the thresholds used to allocate the banks to buckets and provides the links to the public disclosures of the full sample of banks assessed, as determined by the sample criteria set out in the BCBS G-SIB framework. The BCBS also publishes the thirteen high-level indicators of the banks in the assessment sample used in the G-SIB scoring exercise for 2025.10
  2. A new list of G-SIBs will next be published in November 2026.
G-SIBs 2012-2025
  1. In November 2011 the FSB published an integrated set of policy measures to address the systemic and moral hazard risks associated with systemically important financial institutions (SIFIs). In that publication, the FSB identified as global systemically important financial institutions (G-SIFIs) an initial group of G-SIBs, using a methodology developed by the BCBS. The November 2011 report noted that the group of G-SIBs would be updated annually based on new data and published by the FSB each November. ↩︎
  2. The majority of banks reported data as of 31 December 2024. Exceptions include most banks from Australia (of which four reported data as of 30 September 2024) and all banks from Canada (31 October 2024), India (31 March 2025) and Japan (31 March 2025). ↩︎
  3. See BCBS (2018), Global systemically important banks: revised assessment methodology and the higher loss absorbency requirement, July. The G-SIB assessment methodology is set out in chapter SCO40 of the Basel Framework. ↩︎
  4. In case of a bucket decrease, the lower level of loss absorbency required will be effective immediately, unless national authorities exert discretion to delay the release of the higher loss absorbency requirement (see RBC40.6 of the Basel Framework). ↩︎
  5. In some jurisdictions, G-SIBs may be required to set aside additional capital buffers under the relevant higher loss absorbency requirements for domestic systemically important banks (D-SIBs).  ↩︎
  6. G-SIB buffers are part of the buffers in the Basel III capital framework, complementing the Basel III minimum capital requirements. The Basel III monitoring results published by the BCBS provide evidence on the aggregate capital ratios under the Basel III frameworks, as well as the additional loss absorbency requirements for G-SIBs. ↩︎
  7. See FSB (2015), Total Loss-Absorbing Capacity (TLAC) Principles and Term Sheet, November. The BCBS published the final standard on the regulatory capital treatment of banks’ investments in instruments that comprise TLAC for G-SIBs on 12 October 2016. In March 2017 (updated in December 2018), the BCBS published a consolidated and enhanced framework of Pillar 3 disclosure requirements, including new disclosure requirements in respect of TLAC.  ↩︎
  8. The timeline for the implementation of resolution planning requirements for newly designated G-SIBs was also set out in the FSB (2013), 2013 Update of group of global systemically important banks (G-SIBs), November: Annex II. ↩︎
  9. The timeline for G-SIBs to meet this requirement was also set out in the FSB 2013 Update, ibid. ↩︎
  10. See BCBS,Global systemically important banks: Assessment methodology and the additional loss absorbency requirement. ↩︎

FSB publishes 2025 G-SIB list

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Ref: 24/2025

  • 29 banks remain in the FSB’s annual list of global systemically important banks (G-SIBs).
  • Compared with the list of G-SIBs published in 2024, three banks have moved between categories (i.e. buckets): Bank of America and Industrial and Commercial Bank of China have moved to a higher bucket, corresponding to a higher capital requirement, while Deutsche Bank has moved to lower bucket, corresponding to a lower capital requirement. 
  • The changes in the allocation to buckets largely reflect the effects of changes in the complexity of banks’ underlying activities.

The Financial Stability Board (FSB) today published the 2025 list of global systemically important banks (G-SIBs) using end-2024 data and applying the assessment methodology designed by the Basel Committee on Banking Supervision (BCBS).

The number of banks identified as G-SIBs remains at 29. There were no additions or removals from the list. However, compared with the list of G-SIBs published in 2024, Bank of America and Industrial and Commercial Bank of China have moved from bucket 2 to bucket 3 (corresponding to a higher capital requirement), while Deutsche Bank has moved from bucket 2 to bucket 1 (corresponding to a lower capital requirement). 

FSB member authorities apply the following requirements to G-SIBs:

  • Higher capital buffer: The G-SIBs are allocated to buckets corresponding to higher capital buffers that they are required to hold by national authorities in accordance with international standards. The capital buffer requirements established by the 2025 list will be effective beginning 1 January 2027.   
  • Total Loss-Absorbing Capacity (TLAC): G-SIBs are required to meet the TLAC standard, alongside the regulatory capital requirements set out in the Basel III framework.
  • Resolvability: These requirements include group-wide resolution planning and regular resolvability assessments. The resolvability of each G-SIB is reviewed in the FSB Resolvability Assessment Process (RAP) by senior regulators within the firms’ Crisis Management Groups. 
  • Higher supervisory expectations: These include supervisory expectations for risk management functions, risk data aggregation capabilities, risk governance and internal controls. 

The BCBS today published material related to the identification of G-SIBs, including updated denominators used to calculate banks’ scores; the thresholds used to allocate the banks to buckets; and the values of the thirteen high-level indicators of all banks in the assessment sample used in the G-SIB scoring exercise. The BCBS also provides the links to the public disclosures of all banks in the full sample of banks assessed. The BCBS interactive G-SIB dashboard has also been updated to reflect the latest results.

A new list of G-SIBs will be published in November 2026.

Notes to editors

The requirements for G-SIBs summarised above are “higher” in the sense that they are additional to the minimum standards that apply to all internationally active banks under the Basel Framework. G-SIBs are allocated into buckets based on their systemic importance. The higher the bucket, the greater the additional capital requirement. The bucket approach is defined in paragraphs SCO40.20 to SCO40.22 of the Basel Framework.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Andrew Bailey, Governor of the Bank of England. The FSB Secretariat is located in Basel, Switzerland and hosted by the Bank for International Settlements.

FSB releases updated insurer list, proposes new guidance, and affirms use of IAIS Holistic Framework

25 November 2025

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Ref: 23/2025

  • FSB publishes list of insurers subject to resolution planning standards with seventeen insurers, up from thirteen insurers in 2024.
  • The FSB is also consulting on guidance on the scope of insurers that should be subject to recovery and resolution planning (RRP) requirements, to promote consistency in application across FSB member jurisdictions.  
  • The FSB reaffirms its decision to use the International Association of Insurance Supervisors (IAIS) Holistic Framework assessments instead of an annual identification of global systemically important insurers (G-SIIs).

The Financial Stability Board (FSB) today published a list of 17 insurers subject to resolution planning standards consistent with the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions (Key Attributes).

Alongside this, the FSB launched a consultation on draft guidance outlining key criteria for authorities to consider when determining whether an insurer should be subject to RRP requirements. The draft guidance calls for authorities to evaluate an insurer’s nature, scale, complexity, substitutability, cross-border activities, and interconnectedness. It also highlights specific scenarios in which RRP requirements should always apply, such as when an insurer provides critical functions that cannot be easily substituted or when its failure could significantly impact financial stability or the real economy.

The Draft Guidance does not reintroduce the previous process for identifying G-SIIs. Instead, it focuses exclusively on determining which insurers should be subject to RRP requirements under the Key Attributes, with these decisions made at the national level. Being on the list does not imply that an insurer is systemically important.

The FSB has also published a statement reaffirming its decision to rely on the IAIS Holistic Framework assessments rather than reintroducing the annual identification of G-SIIs.

Notes to editors

In 2011, the FSB introduced policy measures to address systemic and moral hazard risks from systemically important financial institutions. In 2013, it identified an initial list of G-SIIs and applicable policy measures, in consultation with the IAIS and national authorities. In December 2022, the FSB announced that it would discontinue the annual identification of global systemically important insurers, deciding instead to utilise assessments available through the IAIS Holistic Framework to inform its considerations of systemic risk in the insurance sector and to publish annually a list of insurers subject to resolution planning standards aligned with the FSB Key Attributes. This first list was published in December 2024.

The FSB continues to consult with the IAIS on resolvability monitoring and public reporting for the insurance sector. Today, the IAIS launched consultation on guidance (“application papers”) on recovery and resolution. Further details of the IAIS Holistic Framework and the IAIS’ public consultation can be found on the IAIS website here and here.

The IAIS is a global standard-setting body whose objectives are to promote effective and globally consistent supervision of the insurance industry to develop and maintain fair, safe and stable insurance markets for the benefit and protection of policyholders and to contribute to the maintenance of global financial stability. Its membership includes insurance supervisors from more than 200 jurisdictions.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Andrew Bailey, Governor of the Bank of England. The FSB Secretariat is located in Basel, Switzerland and hosted by the Bank for International Settlements.