IMF Working Papers

We study how banking crises reshape nonbank financial institutions’ (NBFIs) role in corporate debt markets using primary-market syndicated loans and corporate bonds over 1990–2025. We find that NBFI cyclicality is function-specific: NBFIs contract syndicated loans relative to banks but expand corporate bond underwriting, especially through bank-affiliated NBFIs. Firms with stronger pre-crisis NBFI underwriting relationships are more likely to switch from loans to bonds, raise more bond financing, experience smaller declines in total borrowing, and exhibit stronger crisis outcomes. This reconciles competing views of nonbank cyclicality: NBFIs may amplify stress as loan-market risk bearers while preserving market access as bond underwriters.