The 2017 monitoring exercise uses data up to end-2016 from 29 jurisdictions (which, for the first time, includes Luxembourg) representing over 80% of global GDP.
The Report also includes a set of collaborative case studies that discuss the following types of non-bank financial entities and activities in greater detail:
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the non-bank credit cycle;
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non-financial corporates’ cash management as a demand factor;
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developments and adaptations in housing finance markets; and
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loan funds in the European Union (EU).
The main findings from the 2017 monitoring exercise are as follows:
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The activity-based, narrow measure of shadow banking grew by 7.6% in 2016 to $45.2 trillion for the 29 jurisdictions. This represents 13% of total financial system assets of these jurisdictions.
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CIVs with features that make them susceptible to runs (e.g. open-ended fixed income funds, credit hedge funds and money market funds), grew by 11% in 2016. The considerable growth of these CIVs has been accompanied by a relatively high degree of investment in credit products and some liquidity and maturity transformation. This growth is seen to highlight the importance of implementing the 2017 FSB policy recommendations.
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The assets of non-bank financial entities engaged in loan provision that is dependent on short-term funding, such as finance companies, shrank by almost 4% in 2016, to 6% of the narrow measure. In some jurisdictions, finance companies are described as having relatively high leverage and maturity transformation, which increases their susceptibility to roll-over risk during period of market stress.
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“Other Financial Intermediaries” (OFIs), which includes all financial institutions that are not central banks, banks, insurance corporations, pension funds, public financial institutions or financial auxiliaries, grew by 8% to $99 trillion. OFI assets now represent 30% of total financial assets, the highest level since at least 2002.
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