The Financial Stability Board (FSB) has released three reports aimed at enhancing resilience in nonbank financial intermediation (NBFI). These reports include final policy recommendations to address financial stability risks posed by NBFI leverage, an annual progress report on NBFI, and a workplan to tackle nonbank data challenges.
The FSB's recommendations on NBFI leverage have been submitted to the G20. They outline an integrated approach for identifying and addressing financial stability risks associated with NBFI leverage. Authorities are encouraged to tailor their policy responses according to their specific circumstances, considering potential adverse effects. The recommendations are directed at FSB member authorities and focus on markets, entities, and activities where NBFI leverage poses risks.
"The recommendations reflect feedback from a public consultation," the FSB stated. It acknowledged the heterogeneity of nonbanks and noted that some leveraged activities by nonbanks can facilitate hedging, enhance efficiency, and support liquidity in financial markets.
The 2025 NBFI Progress Report indicates that the original policy elements of the FSB’s NBFI work programme are largely complete. The focus will now shift towards assessing vulnerabilities, addressing data challenges, sharing members’ insights, and evaluating policy implementation.
To address data challenges identified during its work programme, the FSB has established a Nonbank Data Task Force (NDTF), chaired by Andrew Bailey. The task force aims to improve authorities' ability to identify vulnerabilities stemming from nonbank sectors and assess policies to mitigate these risks. A test case on leveraged trading strategies in sovereign bond markets has been launched as part of this effort.
At the request of the South African G20 Presidency, the FSB is submitting a workplan outlining how the task force's work will be structured. A report on this test case is expected by mid-2026.
In addition to these efforts, the FSB plans an analytical deep dive into vulnerabilities in private credit.
The FSB coordinates international efforts among national financial authorities and standard-setting bodies. It brings together national authorities responsible for financial stability across 24 countries and jurisdictions along with international institutions.
Andrew Bailey chairs the FSB while its Secretariat is located in Basel, Switzerland.