BIS paper finds ‘mixed’ evidence of non-banks triggering spillovers
“Extreme” capital flows have not worsened, but central banks are also more active, authors note
The evidence that non-bank financial intermediation (NBFI) worsens cross-border spillovers is “mixed”, research published by the Bank for International Settlements finds.
Authors Egemen Eren and Philip Wooldridge say there are several channels through which NBFI could transmit stress across borders. Currency and liquidity mismatches, the use of leverage and herding behaviour can all create instability. BIS statistics also show a clear increase in the share of global finance intermediated by non
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