The news: In a recent blog post, the International Monetary Fund (IMF) stressed the risks that nonbank financial institutions (NBFIs) pose to the financial system and warned that their lack of regulatory oversight could cause the next global financial crisis.
Global acceleration: Since the 2008 financial crisis, the growth of NBFIs—institutions like pension funds, insurers, and hedge funds—has exploded. As of 2021, NBFIs held about $239 trillion in assets, according to the Financial Stability Board, or nearly half of global financial assets.
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