The rise of non-bank financial institutions: implications for monetary policy
Published 1 Dec 2025 ยท bis
Non-bank financial institutions have grown significantly in recent years, mainly driven by investment funds including hedge funds. This growth reflects bond market expansion backed by surging government debt. NBFIs add uncertainty to monetary policy transmission through both dampening and amplifying effects. Investment funds strengthen transmission but make it less stable, requiring gradual policy approaches with flexibility.
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