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Sometimes — when researching other things — we come across data sets that are just too cool not to share.
In this case it’s a snapshot of all the world’s financial assets held by all the world’s financial entities at the end of 2023 — all $480tn of it:
The data comes from the Financial Stability Board — the international body that monitors and makes recommendations about the global financial system. It’s analysed at length each year in their weighty Global Monitoring Report on Non-Bank Financial Intermediation — the most recent version of which came out in December 2024.
Nonbank financial institutions have been taking up more and more of the FSB’s time. And if the sheer size of financial assets is any guide to the amount of focus they should command, the dataviz shows why this is the case.
Moreover, some of the most spectacularly blow-ups in recent years have come out of NBFIs. The 2020 ‘dash for cash’ saw stress in hedge funds’ US Treasury basis trade forcing a Fed intervention. The “Archegos default” in 2021 triggered a global sell-off in banking stocks and contributed to Credit Suisse’s downfall. And the LDI blow-up in 2022, saw pension funds rapidly deleverage — trashing the gilt market and gifting an unlikely victory to the iceberg lettuce that took on Prime Minister Liz Truss in a battle of longevity.
As Martin Arnold wrote in MainFT, the FSB recommended — in their final report on leverage in non-bank financial intermediation last week — that hedge funds and other non-bank groups “face limits on the amount of leverage they can use” and also that they provide more disclosure to regulators. This went down like a cup of cold sick among hedgies.
And there looks like there will be more of the same coming down the pipe, with the FSB announcing a new high level task force to “identify and address areas where it lacks sufficient data on the build-up of leverage outside of banks”.
This means more data. 🥳 🎉 🥳
When their work is complete we hope to provide an even more granular breakdown of the NBFI universe.
