Financial Stability Review no. 22: April 2018

The 22nd edition of the Banque de France’s Financial Stability Review is entitled “Non-bank finance: trends and challenges”. The 2007-2008 global financial crisis brought to light the prominent role played by shadow banking, a financial intermediation system that had emerged outside the traditional banking system and that had been held partly responsible for the rise in financial imbalances. Since then, non-bank finance has continued to expand, driven in particular by growth in asset management and the arrival, or return, of non-bank entities to areas of activity which had traditionally been the preserve of banks. Meanwhile, the Financial Stability Board has contributed to improving the mapping, monitoring and supervision of non-bank finance, with a view to transforming shadow banking into resilient market-based finance, as well as to increasing the resilience of the financial system as a whole. Three issues must be addressed as a priority: deepening our knowledge of the non-bank financial system and improving its transparency; measuring and testing the interconnections across the entire financial system; drawing up a microprudential and macroprudential regulatory framework suited to the non-banking sector.