Where Do Banks End and NBFIs Begin? | “The Next Financial Crisis?”

The presentation offers a compelling and well-argued alternative to the conventional ‘substitution view’ of NBFI growth. Cetorelli’s argument that banks are not dying but transforming, and that NBFIs are dependent on bank support, is supported by granular data from US stress tests and the new Flow of Funds tool. The emphasis on the difficulty of pricing credit lines to NBFIs due to correlated drawdown risk is a particularly insightful point. However, the paper is a working paper and the evidence is primarily US-centric, which may limit its generalizability. The discussants likely provided valuable critical feedback, but their remarks are not included in the transcript. The presentation is rigorous and well-structured, but it is an expert opinion rather than a peer-reviewed study. The title accurately reflects the content, and the session is part of a broader conference on the next financial crisis, adding to its relevance. Overall, the video provides a high-quality, thought-provoking analysis of a critical topic in financial stability.

The title accurately reflects the session's focus on the boundary between banks and non-bank financial intermediaries.

8/10

Presentation by a Federal Reserve economist at a top-tier ECB conference, with rigorous data analysis and discussion by renowned academics. However, it is a working paper not yet peer-reviewed, and the speaker's views are his own.

Markers derived by PSI from the transcript: the creator did not define chapters.

• 00:00Introduction by chair Amit Seru
• 00:30Cetorelli begins presentation, outlines research program
• 03:00Discussion of parallel and substitution views
• 05:00Introduction of transformation view and key takeaways
• 10:00Evidence on bank lending to NBFIs
• 15:00Analysis of banks' holdings of NBFI liabilities
• 20:00Discussion of credit lines and systemic risk implications
• 25:00Conclusion and implications for regulation

• ECB Annual Research Conference 2025 programme — Conference programme page providing details of the session and paper.
• YouTube playlist of conference sessions — Playlist containing other sessions from the conference.

• Financial Stability Board - Global Monitoring Report on Non-Bank Financial Intermediation 2023 — Reports on the growth and risks of NBFIs, supporting the paper's premise.

• The Bank for International Settlements - The changing role of non-bank financial intermediation — Some analyses suggest NBFIs may reduce systemic risk by diversifying funding sources, contrasting with the paper's emphasis on increased bank exposure.