NY Fed, Report: Enhancing Monitoring of NBFI Exposure, The Case of Open-End Funds

“These results imply innovative insights for monitoring NBFIs: (a) monitoring of direct exposures may not be sufficient, as risks from indirect channels of exposure can be significant during periods of stress; (b) these exposures are likely heterogeneous across bank holding companies, with the heterogeneity likely driven by differences in business models.”

“Of course, the picture could be even more complex than that, once we take into account the simultaneous presence in the same markets of other nonbank types, besides just funds. The next post  (NY Fed, Report: Monitoring Banks’ Exposure to Nonbanks, The Network of Interconnections Matters, 4/18/23) enriches the analysis of indirect exposures by highlighting  important network interconnections among banks and twelve different NBFI segments.”