Discussion Paper

Enhancing Monitoring of NBFI Exposure: The Case of Open-End Funds

Abstract: Non-bank financial institutions (NBFIs) have grown steadily over the last two decades, becoming important providers of financial intermediation services. As NBFIs naturally interact with banking institutions in many markets and provide a wide range of services, banks may develop significant direct exposures stemming from these counterparty relationships. However, banks may be also exposed to NBFIs indirectly, simply by virtue of commonality in asset holdings. This post and its companion piece focus on this indirect form of exposure and propose ways to identify and quantify such vulnerabilities.

Keywords: banks; nonbanks; nonbank financial institutions (NBFIs); supervision;

JEL Classification: G1; G2;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2023-04-18

Number: 20230418a