ECB releases paper on strengthening the macroprudential lens in the regulation of non-bank financial intermediation
- NBFI has grown since the global financial crisis, bringing benefits for EU capital markets, investment and growth, but also vulnerabilities such as leverage, liquidity mismatch and bank links.
- The Eurosystem says current regulation lacks sufficient ex ante macroprudential tools and proposes targeted measures, data strategy, surveillance and policy development, focusing mainly on asset management.
Context
The ECB's release on enhancing macroprudential oversight for non-bank financial intermediation (NBFI) highlights growing concerns about vulnerabilities stemming from its expansion since the financial crisis. By identifying gaps in current regulations and proposing specific measures, this signals a shift towards tighter oversight that could influence risk dynamics in capital markets and potentially affect investment flows and interest rates in the region.
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