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Strengthening the macroprudential framework for non-bank financial intermediaries

Non-bank financial intermediaries (NBFIs)—such as investment funds, insurers, and pension funds—now manage around 40% of the assets within the German financial system. Recent periods of market stress have demonstrated that they can pose significant systemic risks.

Strengthening the macroprudential framework for non-bank financial intermediaries

Why a stronger framework is necessary

Given their growing weight, NBFIs may pose risks to the stability of the financial system as a whole. The Eurosystem and the Deutsche Bundesbank therefore propose targeted strengthening of the macroprudential framework for this sector.

The most important recommendations

  • Improved data exchange and easier data access
  • Expanded and higher-quality NBFI data
  • A macroprudential instrument for limiting liquidity risks
  • Closer cooperation among macroprudential authorities
  • System-wide (cross-sector) stress tests
  • Swift implementation of the Financial Stability Board (FSB) recommendations

Outlook

These measures are intended to increase the financial system’s resilience to future periods of stress and to significantly improve transparency regarding risks in the non-bank sector.

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