The International Monetary Fund (IMF) stated that non-bank financial institutions play a key role in the global financial system and that these institutions should be strongly regulated and supervised.
The IMF has released the analytical part of its Global Financial Stability Report.
In the report, titled “Non-Bank Financial Institutions: Vulnerabilities Amid Tighter Financial Conditions”, it was stated that non-bank financial institutions play a key role in the global financial system by increasing access to credit and supporting economic growth.
In the report, it was pointed out that the financial fragility of non-bank financial institutions may have increased in recent years due to low interest rates.
Pointing out that in the current environment of high inflation and tighter financial conditions, central banks may face complex and difficult balances between addressing financial stability risks and achieving price stability targets during market stress. It was noted that he needed suitable tools to exit.
“The supervision of non-bank financial institutions is of vital importance”
The report stated that while non-bank financial institutions’ direct access to central bank liquidity may be necessary in times of stress, the implementation of appropriate protective measures is crucial.
“Strong oversight, regulation and supervision of non-bank financial institutions is vital. Priorities should be to close key data gaps, promote risk management by non-bank financial institutions, make appropriate regulations and intensify supervision,” the IMF report said.
“Non-bank financial institutions need to be regulated and audited from numerous different angles,” the report said.
“As financial conditions tighten, the vulnerabilities of the non-bank financial sector come to the surface”
On the other hand, in the blog post about the report written by Antonio Garcia Pascual, Deputy Head of the IMF’s Global Markets Analysis Department, Fabio Natalucci, Deputy Head of the Money and Capital Markets Department, and Thomas Piontek, Senior Financial Sector Specialist in the Global Markets Analysis Department, it is stated that as financial conditions tighten, non-bank finance sector vulnerabilities were highlighted.
In the article, which stated that non-bank financial institutions are the key players in the financial sector, it was stated that global financial stability may depend on the resilience of these institutions.
“Policymakers need appropriate tools to deal with turmoil in the non-bank financial sector, which may adversely affect financial stability,” the article said.