Nonbank Financial Sector Grows Twice as Fast as Traditional Banks in 2024
Basel, Tuesday, 16 December 2025.
Global nonbank assets surged to $256.8 trillion in 2024, expanding twice as fast as traditional banks and now controlling over half of the world’s financial system.
Shadow Banking Eclipses Traditional Lenders
On December 14, 2025, the Financial Stability Board (FSB) released its annual Global Monitoring Report, confirming a pivotal moment in financial history: the nonbank financial intermediation (NBFI) sector now commands 51% of total global financial assets [1]. The data, covering 2024, reveals that this sector—often referred to as “shadow banking”—grew at a rate of 9.4%, drastically outpacing the traditional banking sector, which expanded by only 4.7% over the same period [1]. This growth differential of 4.7 percentage points underscores a rapid migration of activity away from regulated banks toward a diverse ecosystem of investment funds, insurers, and private credit vehicles [2].
A Structural Shift in Global Capital
The surge in nonbank assets to $256.8 trillion was not evenly distributed but was driven by specific high-risk segments [1][3]. The fastest-growing sub-sector, categorized as “other financial intermediaries”—a bucket that includes hedge funds, money market funds, and structured finance vehicles—expanded by 11% to reach $169.4 trillion [1][2]. This expansion signals a return to pre-pandemic market shares for nonbanks, fueled by buoyant risk appetite, rising asset prices, and a macroeconomic environment characterized by lower policy rates [2]. The report, which aggregates data from 29 jurisdictions representing over 90% of global GDP, indicates that this trend is broad-based rather than confined to a single region [2][3].
Systemic Risks and Data Blind Spots
While the diversification of credit sources can support economic activity, the FSB’s report highlights significant vulnerabilities. The “narrow measure” of NBFI—a specific metric tracking entities that perform bank-like activities and pose similar financial stability risks—jumped by 12% in 2024 to $76.3 trillion [1][2]. This metric is critical for regulators as it identifies the portion of the shadow banking world most susceptible to runs or liquidity crises. The rapid double-digit growth in this high-risk segment suggests that systemic vulnerabilities are accumulating outside the direct view of traditional bank supervisors [2].
Future Surveillance Focus
Looking ahead, the FSB has outlined a clear mandate for 2026. The organization plans to prioritize the assessment of private assets and their potential to disrupt financial stability [1][3]. With the nonbank sector now controlling the majority of global financial assets, the tension between fostering market liquidity and ensuring systemic resilience remains a central challenge for policymakers. As Andrew Bailey and the FSB coordinate with international bodies, the focus will likely intensify on closing the data gaps that currently obscure the true extent of leverage and liquidity risk within the private credit ecosystem [1][4].