The Basel Committee on Banking Supervision has published a horizon scanning report on banks' interconnections with non-bank financial intermediaries (NBFIs).
The NBFI sector continues to grow and evolve in ways that could present risks and vulnerabilities to the global banking system. Banks are connected to NBFIs through a wide range of direct and indirect activities and services. The report describes these linkages and the risks their exposures to each other pose. It builds on case studies to discuss stylised scenarios that illustrate the possible impacts of NBFI failure on banks and financial stability. It also discusses the importance of data in monitoring the linkages between banks and NBFIs.
The work is part of the Committee's ongoing analysis of risks and vulnerabilities to the banking system.