The Financial Stability Board (FSB) has released its annual Global Monitoring Report, which shows that the nonbank financial intermediation (NBFI) sector grew at a faster rate than the banking sector in 2024. The report covers data from 29 jurisdictions, representing more than 90% of global GDP.
According to the FSB, the NBFI sector expanded by 9.4% in 2024, reaching $256.8 trillion and accounting for 51% of total global financial assets. This growth was twice as fast as that of the banking sector, which grew by 4.7%. The increase is attributed to strong risk appetite among investors, higher asset prices, and lower policy rates.
All subsectors within NBFI saw growth during the year. Other financial intermediaries—which include money market funds, hedge funds, other investment funds, trust companies, and structured finance vehicles—grew by 11%, totaling $169.4 trillion. Pension fund assets increased by 7%, while insurance corporation assets rose by 6%.
A narrower measure of the NBFI sector—covering entities involved in credit intermediation activities that may pose risks similar to those faced by banks—increased by 12% to $76.3 trillion. The report notes that most vulnerability metrics for these entities remained stable. It found high levels of liquidity transformation among fixed income and mixed funds and elevated leverage among finance companies, broker-dealers, and structured finance vehicles.
The report also highlights challenges related to regulatory data on private credit markets. It states: "The Global Monitoring Report also highlights severe limitations in the availability of data for private credit in statistical and regulatory reports." The FSB plans to focus on assessing how private assets could affect financial stability in future surveillance work.
The FSB was established to monitor developments in nonbank financial intermediation following a request from G20 leaders at the Seoul Summit in 2010. Its aim is to identify vulnerabilities within NBFI and recommend corrective measures when needed.
"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," according to information provided by the organization.
Andrew Bailey serves as chair of the FSB. The Secretariat is based in Basel, Switzerland and is hosted by the Bank for International Settlements.