The Group of Thirty has published a special report on nonbank financial intermediation (NBFI) and financial stability that argues rapid post-global financial crisis growth has created vulnerabilities that could amplify market stress and trigger systemic events, and calls for urgent, coordinated policy action to preserve NBFI’s benefits while reducing its risks. The report estimates NBFI assets at USD 260 trillion globally at end-2024, accounting for more than half of financial intermediation, and links rising systemic risk primarily to liquidity mismatches, high leverage, and tighter interconnections with core bond markets and banks. It points to repeated episodes of liquidity spillovers that required major central bank interventions, including during March 2020 market turmoil and the UK gilt market stress in October 2022, and flags concerns around solvency spillovers to banks and emerging stresses in private credit. Recommended reforms include limiting excessive borrowing and asset-liability mismatches, reducing the procyclicality of margining, strengthening market infrastructure and institutions, maintaining counterparty exposure limits, expanding stress tests focused on interconnections, improving data quality and transparency, and enhancing recovery and resolution burden sharing. It also calls for improved central bank tools to provide targeted liquidity to select NBFI activities and entities, and for adapting the global financial safety net to a larger NBFI sector, including through the maintenance and possible expansion of currency lending facilities and swap lines. Looking ahead, the report highlights further work to calibrate reforms and upgrade monitoring, including more system-wide stress tests and NBFI-focused crisis simulation exercises, alongside central bank investment in frameworks and systems for potential liquidity provision to a wider set of entities and activities.
G30 2026-04-09
Group of Thirty report urges coordinated limits on nonbank leverage and liquidity mismatches as NBFI reaches USD 260 trillion
The Group of Thirty has issued a special report warning that rapid post-crisis growth in nonbank financial intermediation has created vulnerabilities that could amplify market stress and trigger systemic events, and calls for urgent, coordinated policy action. With nonbank assets at an estimated USD 260 trillion at end-2024, the report links rising systemic risk to liquidity mismatches, high leverage and tighter interconnections with bond markets and banks, and recommends reforms to curb excessive borrowing and procyclical margining, strengthen market infrastructure, expand interconnectedness-focused stress tests, and enhance data and transparency.