VoxEU Column
by Falko Fecht & Linda S. Goldberg
“The role of non-bank financial intermediaries in funding markets and financial crises has increased in recent decades. This column examines the rise of the sector and the roles these intermediaries play in liquidity shock transmission. The growth of the non-bank financial intermediation sector can be attributed to technological changes, demographic shifts, and tighter regulation of banks and has been driven particularly by investment funds. Furthermore, there is substantial cross-country variation in non-bank financial intermediary vulnerabilities and their transmission to the banking sector, which depend on domestic financial architecture and institutional arrangements.”