TechFlow news: The European Banking Authority (EBA), the EU's banking regulator, will launch a joint investigation with the European Systemic Risk Board (ESRB) and the Financial Stability Board (FSB) to assess the interconnectedness between traditional banks and non-bank financial institutions (NBFIs), including hedge funds, private equity firms, and cryptocurrency platforms.
EBA Chair José Manuel Campa announced the initiative in an interview with the Financial Times on December 3. Campa emphasized the need to trace the entire "underlying chain of NBFIs" to understand the potential scale of contagion between banks and NBFIs under stress conditions.
According to FSB estimates, NBFIs hold nearly $218 trillion in assets—accounting for about 46% of global financial assets, a larger share than traditional banks, which hold approximately $183 trillion.
