Banking on Nonbanks

IMF Working Papers, February 6, 2026

Source details

Study objective: examine how banking groups adjust corporate credit supply in response to tighter macroprudential policies.
Data: granular data on syndicated corporate loans.
Main result: banking groups reallocate lending from bank subsidiaries toward affiliated nonbank financial institutions (NBFIs) following regulatory tightening.

Relative to bank subsidiaries within the same group, NBFI subsidiaries expand lending after macroprudential tightening.
NBFI subsidiaries' credit supply increases in absolute terms following tightening.
Quantitative estimate: by “banking on” their nonbanks, banking groups offset, on average, more than half of the contraction in bank lending induced by macroprudential tightening.
Implication: an important intra-group reallocation channel allows banking groups to partially offset regulatory constraints and results in greater bank–nonbank interconnectedness.

Empirical approach: analysis based on granular syndicated corporate loan data.
Focus: reallocation of lending within banking groups between bank subsidiaries and affiliated nonbank financial institutions.

Macroprudential tightening aimed at bank credit can be partly neutralized by intra-group shifts toward NBFIs.
Regulatory frameworks should account for intra-group reallocation channels to avoid unintended increases in bank–nonbank interconnectedness.
Monitoring and policy design may need to incorporate affiliated NBFIs when assessing the effectiveness of macroprudential measures.