Nonbanks Are Growing but Their Growth Is Heavily Supported by Banks

Viral V. Acharya, Nicola Cetorelli and Bruce Tuckman (bt577@stern.nyu.edu)
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Bruce Tuckman: https://www.stern.nyu.edu/faculty/bio/bruce-tuckman

No 20240617, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Traditional approaches to financial sector regulation view banks and nonbank financial institutions (NBFIs) as substitutes, one inside and the other outside the perimeter of prudential regulation, with the growth of one implying the shrinking of the other. In this post, we argue instead that banks and NBFIs are better described as intimately interconnected, with NBFIs being especially dependent on banks both for term loans and lines of credit.

Keywords: non-bank financial intermediaries; funding; credit lines (search for similar items in EconPapers)
JEL-codes: G01 G21 G23 G28 (search for similar items in EconPapers)
Date: 2024-06-17
New Economics Papers: this item is included in nep-ban, nep-fdg and nep-pay
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