Board of Governors of the Federal Reserve System

Figure 1. Banks' Holdings of NBFIs as a Share of GDP (1980–2024) and Bank Credit Lines to NBFIs (2012–24)

This figure shows banks' holdings of nonbank financial institutions (NBFIs) as a share of GDP over the 1980-2024 period and the sum of banks' holdings of NBFIs and credit lines as a share of GDP over the 2012-24 period. The two lines demonstrate that, since 2012 when credit line measurement begins, credit line provision from banks grew from 2% of GDP in 2012 to 3% of GDP in 2024. The chart also demonstrates an increase in banks’ holdings of NBFIs as a share of GDP from 3.5% in 1980 to 16% in 2008, which then decreased to 8% as of 2024. Credit lines includes North American Industry Classification System (NAICS) codes 5223, 5241, 5239, 53, 5242, 5222, 5259, and 5231. This chart is created using data from the Federal Reserve System Enhanced Financial Accounts (From Whom To Whom), Form FR Y-14Q, Schedule H.1, and Federal Reserve Economic Data for GDP.

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Figure 2. Comparison of Funding to and by NBFIs in Inflation-Adjusted and Relative Terms

Figure 2a: Inflation-Adjusted Funding to and by NBFIs

Figure 2a, left panel: This panel shows the inflation-adjusted total value in billion U.S. dollar (USD) of nonbank financial institution (NBFI) assets and sectoral liabilities to NBFIs, of which NBFI assets consists, over the period 1980-2024. Inflation-adjusted figures are calculated using base year 2015. The sectoral liabilities to NBFIs include those from banks, government-sponsored enterprises, NBFIs, monetary authority, the real sector, and the rest of the world. The chart also includes a total measurement of liabilities to NBFIs across all of these sectors. Each of the measurements has been steadily increasing since 1980. Notably, total liabilities to NBFIs has increased from 10,000 billion USD in 1980 to approximately 70,000 billion USD as of 2024. This figure was created using data from the Federal Reserve System’s Enhanced Financial Accounts (From Whom To Whom) and the Consumer Price Index series from FRED (USACPIALLMINMEI).

Figure 2a, right panel: This panel shows the inflation-adjusted total value in billion U.S. dollar (USD) of which sectors nonbank financial institutions (NBFIs) are indebted to over the period 1980-2024. Inflation-adjusted figures are calculated using base year 2015. The sectors which NBFIs are indebted to include banks, government-sponsored enterprises, NBFIs, monetary authority, the real sector, and the rest of the world. The chart also includes a total measurement of NBFI liabilities across all of these sectors. Each of the measurements has been steadily increasing since 1980. Notably, total NBFI liabilities have increased from 10,000 billion USD in 1980 to approximately 70,000 billion USD as of 2024. This figure was created using data from the Federal Reserve System’s Enhanced Financial Accounts (From Whom To Whom) and the Consumer Price Index series from FRED (USACPIALLMINMEI).

Figure 2b: Funding to and by NBFIs in Relative Terms

Figure 2b, left panel: This panel is a stacked area chart showing the share of each sectors' contribution to nonbank financial institution (NBFI) total assets over the period 1980-2024. The sectors included are banks, NBFIs, government-sponsored enterprises, monetary authority, the real sector, the rest of the world, and other. Notably, the real sector consists of the majority share of total NBFI assets over the observed period, trailed by NBFIs. The contributions of the rest of the world to NBFI total assets increases over the period observed, being the fourth largest contributor (behind real sector, banks, and the rest of the world) in 1980 to the third largest contributor (behind real sector and NBFIs) in 2024. This figure was created using data from the Federal Reserve System’s Enhanced Financial Accounts (From Whom to Whom).

Figure 2b, right panel: This panel is a stacked area chart showing the share of each sectors' holdings of nonbank financial institution (NBFI) liabilities over the period 1980-2024. The sectors included are banks, NBFIs, government-sponsored enterprises, monetary authority, the real sector, the rest of the world, and other. Notably, the real sector holds the majority share of NBFI liabilities over the observed period, trailed by NBFIs and the rest of the world. The share of NBFI liabilities held by NBFIs and the rest of the world increase over the period observed, while the holdings of the real sector decreases and all other sectors remain stagnant. This figure was created using data from the Federal Reserve System’s Enhanced Financial Accounts (From Whom to Whom).

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Figure 3. Zooming In on Bank Funding of NBFIs

Figure 3a: Inflation-Adjusted NBFIs’ Liabilities Held by Banks (Billion USD)

Figure 3a: This figure shows the inflation-adjusted measure of total nonbank financial institution (NBFI) liabilities held by banks and a breakdown by financial instrument in billion U.S. dollar (USD) from 1980-2024. Inflation-adjusted figures are derived using base year 2015. Financial instruments shown include debt securities, insurance and miscellaneous reserves, bank lending proxy, and equity holdings. There is also a measurement of total banks’ holdings of NBFIs. Notably, in 1980 bank lending proxy is the largest financial instrument at approximately 200 billion USD followed by insurance and miscellaneous reserves at approximately 100 billion USD, while debt securities and equity holdings rest near 0 billion USD. In 1980, total bank holdings of NBFIs is approximately 300 billion USD. In 2008, these dynamics shift with a large spike in insurance and miscellaneous reserves to 1 trillion USD while bank lending proxy and debt securities fall from 800 billion USD in 2008 to approximately 450 billion USD in 2010. Following this shift in 2008, insurance and miscellaneous reserves remains the largest financial instrument at around 900 billion USD until 2024. In 2008, total bank holdings of NBFIs sees a maximum value of 2.5 trillion USD, which then falls to approximately 1.75 trillion USD in 2024. The data which creates this chart is pulled from the Federal Reserve System’s Enhanced Financial Accounts (From Whom To Whom) and the Consumer Price Index series from FRED (USACPIALLMINMEI).

Figure 3b: NBFIs’ Liabilities Held by Banks (in Percent of Total NBFIs’ Liabilities)

Figure 3b: This figure shows the percent share of total NBFI liabilities held by banks over the period 1980-2024. In 1980, the share of total NBFI liabilities held by banks is approximately 3.5%, which rises to approximately 4.5% in 1984. There is then a steady decrease to 2.5% over the period 1984-2000, and a subsequent spike to approximately 5.7% in 2010. There was then a decrease in the percent share of total NBFI liabilities held by banks, which rests at approximately 2.5% as of 2024. The data which creates this chart is pulled from the Federal Reserve System’s Enhanced Financial Accounts (From Whom To Whom).

Figure 3c: Banks’ Holdings of NBFIs Over Total Bank Assets

Figure 3c: This figure shows the percent share of banks' total assets consisting of banks' holdings of NBFI liabilities over the period 1980-2024. In 1980, the share of banks’ total assets consisting of NBFI liabilities is 4%, which steadily increases to approximately 12.2% in 2008. Then, a sharp drop to approximately 8.3% is observed in 2010, another peak in 2012 at 11%, and a subsequent steady decline to approximately 7% in 2024. The data which creates this chart is pulled from the Federal Reserve System’s Enhanced Financial Accounts (From Whom To Whom).

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Figure 4. The Silent Role of Credit Lines in Addition to Bank Holdings of NBFIs

Figure 4a: Bank Holdings and Credit Lines to NBFIs

This figure shows nominal total bank holdings of nonbank financial institution (NBFI) liabilities and credit lines as a stacked area chart over the 2012-2024 period. In 2012 banks’ holdings of NBFIs is approximately 2 trillion USD and credit lines is approximately 0.4 trillion USD. In 2024, banks’ holdings of NBFIs is approximately 2.2 trillion USD while credit lines has increased to 0.9 trillion USD. This chart most notably shows an increase in credit lines over the period observed. Credit lines include North American Industry Classification System (NAICS) codes 5223, 5241, 5239, 53, 5242, 5222, 5259, and 5231. The data in this chart is sourced from the Federal Reserve System Enhanced Financial Accounts (From Whom To Whom) and Form FR Y14 Schedule H.1.

Figure 4b: As a Share of GDP

This figure shows bank holdings of NBFI liabilities, credit lines, and utilized credit as a share of GDP over the 2012-2024 period. Most notably, credit lines and utilized credit both start at about 2% of GDP in 2012, rising steadily to approximately 3% and 4% respectively in 2024. Total bank holdings of NBFis starts at approximately 12.2% in 2012, peaking in 2013 at 14%, then steadily decreasing to 8% in 2024. Credit lines and utilized credit include North American Industry Classification System (NAICS) codes 5223, 5241, 5239, 53, 5242, 5222, 5259, and 5231. The data in this chart is sourced from the Federal Reserve System Enhanced Financial Accounts (From Whom To Whom), Form FR Y14 Schedule H.1, and FRED GDP.

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Figure 5. The Silent Role of Credit Proxy in Addition to Bank Holdings of NBFIs

Figure 5a: Bank Holdings and Credit Proxy to NBFIs

This figure shows nominal total bank holdings of NBFI liabilities and credit proxy as a stacked area chart over the 19990-2024 period. Most notably, credit lines increase from 0.08 trillion USD in 1990 to 0.6 trillion USD in 2024 using the credit proxy measure and bank’s holdings of NBFIs increases from 400 billion USD in 1990 to 2.25 trillion in 2024. The data in this chart is sourced from the Federal Reserve System Enhanced Financial Accounts (From Whom to Whom), Form FR Y14 Schedule H.1, and Form FR Y-9C.

Figure 5b: As a Share of GDP

This figure shows bank holdings of NBFI liabilities and credit proxy as a share of GDP over the 1990-2024 period. In 1990, banks’ holdings of NBFIs is 5.8% of GDP, peaking at 16% of GDP in 2009, and resting at 8% of GDP in 2024. Credit proxy is a smaller percentage of GDP, measuring at 1.8% of GDP in 1990 and 2% of GDP in 2024. The historic mean share of GDP for credit proxy is 1.9%, showing the steadiness of the instrument. The data in this chart is sourced from the Federal Reserve System Enhanced Financial Accounts (From Whom to Whom), Form FR Y14 Schedule H.1, FRED GDP, and Form FR Y-9C.

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Figure 6. Share of NBFI Liabilities owned by Banks in percentage of NBFI Liabilities (left) and Bank Assets (right)

Figure 6, left panel: This panel shows the 5-year average share of nonbank financial institutions' (NBFIs') liabilities, broken down by NBFI type, owed to banks as a percentage of the total NBFI population's liabilities held by banks over the period 1980-2024. NBFI types include asset-backed securities (ABS), broker dealers, closed-end fund (CEF), exchange-traded fund (ETF), finance companies, life insurance (Life ins), money market funds (MMF), mortgage real estate investment trusts (Mortgage REITs), mutual funds, other financial businesses (OtherFinBus), and property and casualty insurance (PC ins). Broker-dealers have historically been the most interconnected subsector, though their reliance on banks has declined since the early 1980s from approximately 50% to a minimum average of approximately 12% in the period 2000-2005, then rising to approximately 25% on average in the period 2020-2024. Other subsectors, such as money market funds (MMFs) and closed-end funds (CEF), exhibit relatively stable but smaller interdependencies. This heterogeneity emphasizes the need for targeted regulatory approaches to address the unique vulnerabilities of each subsector. This data is sourced from the Federal Reserve System’s Enhanced Financial Accounts (From Whom To Whom).

Figure 6, right panel: This panel shows the 5-year average share of banks' assets, broken down by NBFI type, consisting of NBFI liabilities held by banks over the 1980-2024 period. NBFI types include asset-backed securities (ABS), broker dealers, closed-end fund (CEF), exchange-traded fund (ETF), finance companies, life insurance (Life ins), money market funds (MMF), mortgage real estate investment trusts (Mortgage REITs), mutual funds, other financial businesses (OtherFinBus), and property and casualty insurance (PC ins). Broker-dealers are the most connected subsector, contributing to approximately 2.2% of total bank assets over the period 1980-1985, peaking at 6% of total bank assets over the period 2015, and resting at averaging approximately 4.2% over the period 2020-2025. Finance companies are the second most connected subsector, averaging at 2% of total bank assets over the period 1980-1985, peaking at approximately 3% over the period 2000-2005, then falling to 1% over the period 2020-2024. ABS are the third most connected subsector, starting near 0% over the period 1980-1985, peaking at an approximate average of 3.8% over the period 2005-2010, then falling to approximately 0.5% over the period 2020-2024. This data is sourced from the Federal Reserve System’s Enhanced Financial Accounts (From Whom To Whom).

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