Summary of Assessment Methodologies for Identifying Non-Bank Non-Insurer Global Systemically Important Financial Institutions

Proposed High-Level Framework and Specific Methodologies

Financial Stability Board

FSB, 2014

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Assessment Methodologies for Identifying Non-Bank Non-Insurer Global Systemically Important Financial Institutions summary

Shadow banking’s interconnectivity with the global financial system merits regulators’ careful consideration.

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In this report, the Financial Stability Board (FSB) – consisting of the G20’s central bankers and finance ministries – explains how to identify global systemically important financial institutions that are neither banks nor insurance companies. The report’s imposing title belies its straightforward and well-informed examination of “shadow banking” and makes recondite subject matter relatively accessible. Because the Board’s report is consultative in nature and open to public comment, it poses additional questions as much to gauge regulators’ understanding of the issues as to generate additional critical thinking about them. getAbstract commends the FSB’s work, despite its wonkish tone, to regulators, policy makers, economists, financial practitioners and anyone with an interest in the world’s financial plumbing and its inherent risks.

In this summary, you will learn

How the Financial Stability Board (FSB) proposes to identify global systemically important nonbank, noninsurer financial institutions;
What potential risks this “shadow banking” system poses to the global economy; and
How the FSB’s proposed evaluation of these entities addresses these risks.

Summary

Out of the Shadows
Financial disintermediation assumes various shapes and sizes: Nonbank, noninsurer (NBNI) financial institutions – commonly referred to as “shadow banks” – now play critical roles in the economic and financial system. Because of their wide scope and numerous interrelationships...

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About the Author

The Financial Stability Board globally coordinates national financial authorities and international bodies to promote effective financial regulatory and supervisory policies.