Assessing the Ripple Effect: The IMF Bank-NBFI Linkages Indicator
The rapid expansion of the non-bank financial sector has fundamentally altered the landscape of global finance, creating a complex web of dependencies that traditional oversight is only now beginning to map.
The IMF Bank-NBFI Linkages indicator is a multi-dimensional metric used in the Global Financial Stability Report (GFSR) to quantify the systemic risk arising from the interconnectedness between traditional banks and Non-Bank Financial Intermediaries (NBFIs). It measures spillover channels such as direct credit exposures, liquidity lines, and shared asset holdings to assess how a shock in the "shadow banking" sector—including hedge funds, insurers, and pension funds—could destabilize the core banking system.
Understanding the Interconnectedness
As NBFIs now hold nearly 50% of global financial assets, the IMF has shifted its focus toward how these entities interact with regulated banks. The Linkages indicator tracks three primary transmission channels:
Direct Exposures: Loans, credit lines, and derivative contracts where banks act as counterparties to NBFIs.
Funding Dependencies: The extent to which banks rely on NBFIs for short-term funding (e.g., repo markets) or deposits.
Indirect Spillovers: Correlated risks where both sectors hold similar assets, meaning a fire sale by an investment fund could trigger price drops that hurt bank balance sheets.
Key Metrics and Methodology
The IMF utilizes its Global Stress Test (GST) framework to feed the indicator, focusing on specific "vulnerability triggers" that can cause the linkage to turn toxic.
| Metric | Description | Potential Risk |
| Asset Concentration | The share of bank claims held by the top 10% of NBFIs. | Highly concentrated "nodes" can cause systemic failure if one major NBFI defaults. |
| Liquidity Mismatch | The gap between NBFI redemption terms and the liquidity of their underlying assets. | Forced asset sales (fire sales) that depress market prices globally. |
| Cross-Border Linkages | The volume of lending between banks in one country and NBFIs in another. | Shocks in emerging markets can be "imported" back to advanced economy banks. |
Why This Indicator Matters for 2026
In the most recent October 2025 GFSR, the IMF noted that while bank capital ratios are generally healthy, the inclusion of NBFI stress scenarios increased the share of "at-risk" global banks from 18% to 21%. This 3% jump represents trillions in assets that are vulnerable not because of the banks' own lending, but because of their "hidden" ties to the non-bank sector.
Implications for Policy
The Linkages indicator is driving a global push for:
Enhanced NBFI Supervision: Bringing "shadow banks" under more rigorous reporting standards.
System-wide Liquidity Tools: Creating central bank mechanisms that can provide liquidity directly to NBFIs during "runs."
Data Transparency: Closing the "dark spots" in derivative markets and private credit where linkages are hardest to track.
While the IMF monitors Bank-NBFI linkages globally, the intensity of these connections varies significantly based on the depth of a country's capital markets and the size of its "shadow banking" sector.
Leading Countries by Linkage Intensity
In the 2025-2026 GFSR cycle, the IMF highlights that Advanced Economies (AEs) generally exhibit the highest degree of interconnectedness. This is due to the sheer volume of assets managed by investment funds, insurers, and pension funds that use traditional banks for repo funding and derivative clearing.
United States: Holds the highest absolute volume of linkages. The growth of private credit and the dominance of large asset managers make US banks central "nodes" for NBFI liquidity.
Euro Area (Germany/France/Netherlands): Characterized by high ownership linkages, where many NBFIs are actually subsidiaries of large banking groups.
United Kingdom: A global hub for hedge funds and liability-driven investment (LDI) funds, creating high sensitivity to interest rate shifts through bank-provided leverage.
Emerging Markets (China/Korea): While historically bank-dominated, these regions are seeing rapid growth in "fintech" and "trust products" that mimic NBFI behaviors, increasing domestic systemic risk.
Bank-NBFI Linkages Scorecard (2025/26 Estimates)
This scorecard reflects the IMF's assessment of how deeply NBFIs are integrated into the national banking core, based on the Global Stress Test (GST) parameters.
| Country/Region | Linkage Level | Primary Channel | Vulnerability Score |
| 🇺🇸 United States | Very High | Repo Markets & Private Credit | 9.2/10 |
| 🇬🇧 United Kingdom | High | Derivatives & LDI Funds | 8.7/10 |
| 🇪🇺 Euro Area | High | Asset Ownership & Mutual Funds | 8.1/10 |
| 🇨🇳 China | Moderate-High | Wealth Management Products | 7.5/10 |
| 🇰🇷 South Korea | Moderate | Real Estate Finance & Securities | 6.8/10 |
| 🇯🇵 Japan | Moderate | Cross-Border Securities Investment | 6.2/10 |
Understanding the Scorecard Metrics
The Vulnerability Score is a composite of three factors tracked by the IMF:
Step-in Risk: The likelihood that a bank will feel "obligated" to bail out a distressed NBFI affiliate to protect its own reputation.
Funding Concentration: How much of a bank's daily liquidity depends on NBFI deposits or short-term lending.
Contagion Elasticity: How quickly a 10% drop in NBFI asset values translates into a reduction in bank Tier 1 capital.
The Epicenter of Interconnectedness: Bank-NBFI Linkages in the United States
The United States represents the most complex and high-volume environment for Bank-NBFI linkages globally. As of early 2026, the IMF’s monitoring of the U.S. financial system focuses on the shift from traditional lending to a "nexus" where regulated banks and "shadow" entities operate as a single, symbiotic machine.
The U.S. "Nexus" Model
Unlike many European systems where NBFIs are often subsidiaries of banks, the U.S. landscape is dominated by independent, large-scale entities—hedge funds, private equity firms, and asset managers—that rely on banks for the "plumbing" of their operations.
Primary Transmission Channels in the U.S.
The Private Credit "Boom": A defining feature of 2025–2026 has been the rapid migration of corporate lending from bank balance sheets to private credit funds. While this diversifies risk, the IMF warns that banks are now heavily exposed to these funds through subscription credit lines (loans to the funds) and backstop liquidity facilities.
Repo Market Dependency: The U.S. Treasury market relies on NBFIs (especially hedge funds) for liquidity. Banks act as the primary intermediaries in the Repurchase Agreement (Repo) market, meaning a liquidity crunch in the hedge fund sector immediately strains bank balance sheets.
Leverage Magnification: Banks provide the "fuel" for NBFI returns through derivatives and margin lending. In a market downturn, a "margin call" on a large hedge fund can force banks to liquidate collateral, further depressing prices.
IMF Vulnerability Assessment: 2026 Focus
In the October 2025 GFSR, the IMF highlighted a specific "vulnerability cluster" in the U.S. where bank exposures to NBFIs now exceed 100% of their Tier 1 Capital for several Tier-1 institutions.
| Risk Category | U.S. Specific Driver | Current IMF Outlook |
| Step-in Risk | Large banks' reputational ties to "sponsored" investment vehicles. | Rising: Complexity makes "implicit" support more likely during stress. |
| Asset Correlation | Overlapping holdings in Commercial Real Estate (CRE) and tech-heavy private debt. | Critical: Fire sales by NBFIs could trigger bank valuation losses. |
| Operational Risk | Concentration of clearing and settlement in a few "Systemically Important" banks. | Stable but High: Technical failures at one "node" could freeze the repo market. |
Policy Response and "Lender of Last Resort"
The depth of these linkages has prompted a historic debate within the Federal Reserve and the IMF regarding the "Lender of Last Resort" (LOLR) function.
Key Development: As of February 2026, there is increased pressure for the Federal Reserve to formalize liquidity backstops for NBFIs. The IMF argues that because U.S. banks are so deeply linked to non-banks, the Fed can no longer "save the banks" without also stabilizing the "shadow" entities they support.
The Gilt-Edged Connection: Bank-NBFI Linkages in the United Kingdom
In the United Kingdom, the relationship between banks and Non-Bank Financial Intermediaries (NBFIs) is uniquely tight, driven by London's status as a global hub for pension funds, hedge funds, and insurance markets. As of early 2026, the IMF and the Bank of England (BoE) have identified the UK as a primary laboratory for studying "Market-Based Finance" (MBF) risks.
The "London Hub" Transmission Channels
The UK's financial architecture creates specific "pressure points" where NBFI stress can instantly migrate to the core banking sector:
LDI and Pension Fund Nexus: Following the 2022 "mini-budget" crisis, the IMF has closely monitored Liability-Driven Investment (LDI) funds. UK banks act as the primary counterparties for the interest-rate swaps and repo lending that these funds use. A spike in gilt yields triggers margin calls, forcing banks to either provide emergency liquidity or face defaults.
Gilt Repo Market Dependency: The UK banking system is the "plumbing" for the gilt market. Because NBFIs (like hedge funds) hold significant portions of UK sovereign debt, any "dash for cash" leads to a massive surge in demand for bank-intermediated repo funding, potentially "crowding out" credit for the real economy.
Cross-Border Spillover: Many UK-domiciled NBFIs serve global clients. The IMF notes that UK banks often have higher cross-border NBFI claims than their US counterparts, making the UK banking system a transmission belt for financial shocks originating in the EU or Asia.
2025–2026 Stability Indicators
The Bank of England’s December 2025 Financial Stability Report and the IMF’s recent assessments highlight a shift toward "System-Wide Exploratory Scenarios" (SWES) to map these hidden links.
| Linkage Type | UK Specific Risk | 2026 Monitoring Status |
| Synthetic Leverage | High use of derivatives by UK hedge funds to gain gilt exposure. | Tightened: New BoE reporting requirements on "hidden leverage." |
| Liquidity Mismatch | Open-ended funds holding illiquid UK corporate bonds while offering daily redemptions. | Cautionary: IMF warns of "fire sale" risks during high-interest rate periods. |
| Funding Concentration | Major UK banks relying on NBFI deposits for over 20% of their wholesale funding. | Active Management: Banks required to diversify funding "nodes" to avoid NBFI contagion. |
Policy Evolution: The "NBFI Lending Tool"
A landmark development in 2026 is the Bank of England's operationalization of a contingent liquidity facility for NBFIs.
The 2026 Reform: Unlike the 2022 emergency gilt purchases, the BoE is developing a "backstop" tool that allows NBFIs to access liquidity directly under extreme stress. The IMF supports this, noting that in the UK, the bank-NBFI linkage is so deep that the central bank must be able to bypass the "middleman" (banks) to prevent a total systemic freeze.
Integrated Fragility: Bank-NBFI Linkages in the Euro Area
In the Euro Area, the relationship between banks and Non-Bank Financial Intermediaries (NBFIs) has reached a critical scale. As of February 2026, NBFI assets in the bloc have swelled to over €20 trillion, growing three times faster than the banking sector over the last decade. Unlike the U.S., where NBFIs are often independent, the Euro Area is defined by "ownership linkages," where many funds are managed by subsidiaries of the region's largest banks.
The Euro Area "Loop" Channels
A landmark joint report by the ECB and ESRB in February 2026 identifies three systemic roles that Euro Area banks play for the NBFI sector: liquidity management, provision of leverage, and market-making. These roles manifest through two primary risk channels:
Funding Vulnerability: Euro Area banks, particularly Global Systemically Important Banks (G-SIBs), rely on concentrated, short-term funding from investment funds and insurance companies. A market shock triggering fund redemptions would lead to a sudden withdrawal of this wholesale funding from the banking system.
Leverage Amplification: Banks provide the credit and repo facilities that allow NBFIs to scale their positions. In the Euro Area, this is highly concentrated; 80% of funding and 90% of asset exposures are linked to fewer than 20 major banks.
Key Metrics for 2026
The IMF and ECB use granular "AnaCredit" data to monitor these ties. While the system remains resilient, current indicators point to high concentration risks in specific jurisdictions like Ireland and Luxembourg, which act as the bloc's primary NBFI hubs.
| Indicator | Euro Area Status (2026) | Systemic Concern |
| Exposure Concentration | Critical: Top 100 NBFIs account for 46% of total bank exposure. | A single large hedge fund or PE firm default could hit multiple G-SIBs. |
| Ownership Linkage | High: 64 of the top 100 NBFI entities are part of banking groups. | Banks may feel "reputational pressure" to bail out their own funds (Step-in Risk). |
| Cross-Border Leakage | Moderate-High: Assets managed in hubs (IE/LU) serve the entire EU. | Liquidity stress in a Dublin-based fund can drain liquidity from a bank in Italy. |
Strategic Shift: The 2026-2027 Stress Tests
A major evolution in the Euro Area is the launch of the first system-wide stress tests for non-banks, expected to be fully operational by late 2026.
New Supervisory Focus: The European Banking Authority (EBA) and ECB have moved beyond "bank-only" assessments. The 2026 mandates now include "Reverse Stress Tests," where supervisors work backward from a hypothetical NBFI collapse to see which banks would fail first.
Fragmentation and Data Gaps
Despite the integration, the IMF warns that national fragmentation remains a hurdle. Risks are often "hidden" in cross-border transactions outside the EU. To combat this, 2026 has seen a push for a Centralized Data Access Mechanism to give the ECB a "single lens" into the intricate web of derivative and repo trades connecting Parisian banks to global shadow entities.
Circular Vulnerability: Bank-NBFI Linkages in China
In China, the relationship between banks and Non-Bank Financial Intermediaries (NBFIs) is characterized by a "circular" structure. Unlike the market-based linkages in the U.S., China’s linkages are primarily driven by regulatory arbitrage, where banks use NBFIs to move loans off-balance sheet to bypass lending caps and capital requirements.
As of early 2026, the IMF’s Financial System Stability Assessment (FSSA) for China identifies this "shadow banking" nexus as a primary source of systemic fragility, particularly as the property sector continues its structural decline.
The "Banks' Shadow" Transmission Channels
In the Chinese context, the term "Banks' Shadow" refers to NBFIs that act as extensions of the banking system rather than independent market players. The primary channels include:
Wealth Management Products (WMPs): These are the most significant linkage. Banks sell WMPs to retail investors and funnel the proceeds into NBFIs (like Trust companies), which then lend to high-risk sectors like real estate or Local Government Financing Vehicles (LGFVs). By the end of 2025, the WMP market reached approximately $4.76 trillion.
The Trust & Securities Nexus: Securities firms and trust companies often serve as "conduits" for banks. The bank provides the funding, the NBFI provides the "wrapper," and the final borrower receives the credit—concealing the true risk from bank regulators.
Collateral Chains: Banks often accept NBFI-issued products as collateral for interbank lending. If the underlying assets (e.g., a defaulting property developer) fail, the collateral loses value, freezing the interbank repo market.
2026 Vulnerability Scorecard: China Focus
The IMF and the People's Bank of China (PBoC) are currently monitoring "vulnerability clusters" where bank and NBFI risks overlap.
| Risk Indicator | Status (Feb 2026) | Systemic Impact |
| Implicit Guarantees | Critical | Investors expect banks to bail out failing WMPs, creating massive "Step-in Risk." |
| Property Exposure | Very High | Over 25% of NBFI assets are tied to property/construction, currently in a multi-year slump. |
| Transparency Gap | High | Opaque accounting makes it difficult to track "zombie" companies funded via shadow channels. |
| LGFV Interlinkages | Moderate-High | Local government debt is often refinanced through NBFI channels with bank backing. |
The 2026 Regulatory Crackdown
A defining shift this year has been the PBoC’s transition to Basel III "Endgame" standards, which has forced Chinese banks to bring more NBFI exposures back onto their balance sheets.
Key 2026 Development: The IMF notes that while the "Big Six" state-owned banks are resilient, smaller regional and rural banks remain highly vulnerable. These institutions often have NBFI exposures exceeding their total capital, and recent defaults in shadow products (such as the $2.8 billion failure in Hangzhou in early 2026) have put these smaller "nodes" under extreme liquidity pressure.
Strategic Outlook: "Cleaning the Plumbing"
To mitigate these linkages, China is implementing:
De-nesting Rules: Prohibiting banks from investing in NBFIs that simply reinvest in other NBFIs (cutting the "daisy chain").
LGFV Debt Swap Program: Converting high-interest shadow debt into lower-interest, transparent government bonds.
Unified Supervision: The National Financial Regulatory Administration (NFRA) is now closing the "gap" where NBFIs used to operate outside the bank regulator's reach.
The Real Estate Nexus: Bank-NBFI Linkages in South Korea
In South Korea, the linkage between banks and Non-Bank Financial Intermediaries (NBFIs) is uniquely defined by Real Estate Project Financing (PF). As of early 2026, the IMF and the Bank of Korea (BOK) have identified a high degree of "intertwined risk" where traditional banks provide the primary funding for NBFI-led development projects, creating a circular vulnerability.
The "Project Finance" Transmission Channel
The South Korean NBFI sector—which includes securities firms, insurance companies, and mutual credit cooperatives (like Saemaul Undong Bu)—has become a major player in property development. This creates a specific pipeline of risk:
Bridging Loans: NBFIs provide high-interest, short-term "bridge loans" to developers for land acquisition.
Bank Take-out: Once a project reaches a certain milestone, traditional banks provide the main Project Finance (PF) loan to pay off the NBFI bridge loan.
The Contingency Link: If the property market stalls (as seen in the 2024-2025 "Project Finance Crisis"), NBFIs are stuck with bad land loans, while banks face credit risk from the NBFIs they have funded or guaranteed.
2026 Stability Assessment: Key Indicators
The BOK’s February 2026 Financial Market Trends report indicates that while the system is recovering, "pockets of distress" remain in smaller specialized credit finance companies.
| Linkage Channel | Risk Driver | 2026 Status |
| Guarantees/ABCIs | Securities firms guaranteeing "Asset-Backed Commercial Paper" for property deals. | High Alert: PBoC and FSS are monitoring "rollover risk" as debts mature in mid-2026. |
| Wholesale Funding | Banks providing credit lines and repo liquidity to securities firms. | Moderate: Banks have increased collateral hair-cuts to protect against NBFI volatility. |
| Household Debt Loop | NBFIs lending to households for "Jeonse" (lease) deposits, backed by bank credit. | Rising: Tightening bank regulations have pushed riskier borrowers into the NBFI sector. |
The "Safety Valve": 2026 Policy Responses
To prevent a systemic freeze, South Korea has introduced several innovative "backstop" mechanisms this year:
NBFI Liquidity Simulation Exercises: As of January 2026, the Bank of Korea now conducts regular simulated Repo purchases directly from NBFIs to ensure they can access cash without draining commercial banks during a crisis.
PF Restructuring Fund: A government-backed vehicle designed to "clean up" distressed property sites, preventing the default of NBFIs that could otherwise drag down their bank counterparties.
Stress Capital Buffers: New regulations requiring banks to hold extra capital specifically against their indirect exposures to the property market via NBFI lending.
IMF Insight: The IMF's 2025/26 Article IV Consultation for Korea noted that while "financial stability risks remain manageable," the authorities must expedite the restructuring of weak NBFIs to prevent "slow-motion contagion" to the core banking system.
Global Capital Provider: Bank-NBFI Linkages in Japan
In Japan, the relationship between banks and Non-Bank Financial Intermediaries (NBFIs) is distinctive due to the country’s role as a major source of low-cost global liquidity. As of February 2026, the IMF and the Bank of Japan (BOJ) have highlighted that while Japan’s domestic linkages are traditionally stable, the outward-facing connections between Japanese megabanks and foreign NBFIs represent a significant "global spillover" channel.
The "Global Liquidity Provider" Channels
Japanese banks act as the primary engine for the "Yen Carry Trade," which creates deep, sensitive linkages with global non-bank entities:
Securities Investment Linkages: Japanese life insurers and pension funds (such as the GPIF) are massive holders of foreign bonds. To hedge the currency risk of these holdings, they rely on Japanese megabanks for foreign exchange (FX) swap markets. If bond yields spike globally, these NBFIs face margin calls, putting immediate liquidity pressure on the banks.
The Investment Trust Boom: Driven by the 2024–2025 NISA (Nippon Individual Savings Account) reforms, Japanese households have shifted trillions of yen into investment trusts. These trusts are often managed by bank-affiliated NBFIs, creating a high degree of ownership linkage similar to the Euro Area.
Foreign NBFI Lending: Japanese megabanks have significantly expanded their lending to foreign NBFIs—particularly U.S.-based private equity and credit funds—to seek higher yields than those available domestically.
2026 Stability Assessment: Key Indicators
The BOJ’s October 2025 Financial System Report introduced a "red" warning on the heat map for institutional investors' equity weighting, signaling that Japanese NBFIs are taking on more risk as domestic interest rates finally begin to rise.
| Linkage Channel | Risk Driver | 2026 Status |
| Outward Investment | Megabanks' $550B commitment to U.S. markets via NBFI channels. | High Monitoring: IMF warns this could "crowd out" domestic liquidity. |
| Yen Interest Rate Risk | NBFIs holding long-term JGBs as the BOJ normalizes rates. | Active Management: Insurers are shifting portfolios to avoid valuation hits. |
| Trust Fund Redemptions | Retail investors exiting investment trusts if the Yen strengthens sharply. | Moderate: "Step-in risk" is high for banks managing these retail funds. |
The 2026 Policy Pivot: "Sanaenomics" and Resilience
Following the February 2026 elections, the Japanese government has signaled a continuation of supportive fiscal policies. However, the Bank of Japan is simultaneously tightening the "macroprudential net" around NBFIs.
Exploratory Stress Testing: In late 2025, the BOJ conducted its first "exploratory analysis" specifically focusing on the growing presence of domestic and foreign investment funds in the Japanese market.
FX Swap Backstops: To prevent a repeat of historical dollar-funding squeezes, Japanese banks are being encouraged to diversify their liquidity sources beyond just the central bank, looking toward more stable NBFI counterparty arrangements.
Enhanced NBFI Transparency: New reporting standards for "Asset Management Centers" (launched in 2025) now require NBFIs to disclose their leverage levels to the BOJ on a quarterly basis.
IMF 2026 Article IV Insight: The IMF noted on February 17, 2026, that Japan’s "large stock of net foreign assets" creates unique interlinkages. If Japanese NBFIs "dash for cash" by selling foreign assets, the resulting repatriated capital could cause a sharp Yen appreciation, hurting bank balance sheets that are exposed to export-heavy industries.
Global Best Practices in Managing Bank-NBFI Linkages
As of early 2026, the "Golden Standard" for financial stability has shifted. Leading nations have moved beyond simple bank capital requirements to a system-wide supervisory approach. The IMF and the Financial Stability Board (FSB) now advocate for a "same activity, same risk, same rules" framework to prevent risk from simply migrating from regulated banks into the "shadows."
Best Practices Across Leading Jurisdictions
Leading economies are implementing a three-pillar strategy to manage the "Nexus" risk effectively.
1. Data Granularity & "Mapping the Dark Nodes"
The UK Model: The Bank of England’s System-Wide Exploratory Scenario (SWES) is the global benchmark. It doesn't just test banks; it asks NBFIs how they would behave in a crisis and then maps how those actions (like selling gilts) would impact bank balance sheets.
The EU Approach: Utilization of AnaCredit and EMIR (European Market Infrastructure Regulation) data allows the ECB to see transaction-level links between banks and investment funds in real-time.
2. Liquidity Preparedness & Margining
The U.S. "Stress-Ready" Repos: Best practice now involves banks requiring higher "haircuts" (extra collateral) when lending to highly leveraged hedge funds. In 2025-2026, U.S. regulators have pushed for central clearing of Treasury repos to increase transparency and reduce the "daisy chain" of risk.
The Korean/Irish Buffer: In 2024–2025, Ireland and Luxembourg (and more recently South Korea) implemented minimum liquidity buffer requirements specifically for open-ended funds to ensure they don't have to "fire sale" assets and trigger bank losses during a run.
3. Structural "De-Nesting"
The Chinese Strategy: A critical best practice in 2026 is "De-nesting"—prohibiting financial products from investing in other opaque products. This simplifies the linkage, making it easier for regulators to see the "end borrower" (e.g., a real estate developer) at the end of the bank-NBFI chain.
Summary Table: Best Practice Scorecard by Country
| Country/Region | Best Practice Focus | 2026 Implementation Status |
| 🇬🇧 United Kingdom | System-Wide Stress Testing | Advanced: Full integration of NBFI/Bank simulations. |
| 🇺🇸 United States | Counterparty Transparency | High: Shift toward mandatory central clearing for repos. |
| 🇪🇺 Euro Area | Cross-Border Supervision | High: Unified ECB-ESRB monitoring of fund hubs (IE/LU). |
| 🇨🇳 China | Regulatory Consolidation | Improving: "De-nesting" rules are removing shadow layers. |
| 🇯🇵 Japan | FX Swap Resilience | Moderate: Focusing on megabank exposure to global funds. |
Conclusion: The New Financial Architecture
The IMF Bank-NBFI Linkages indicator has proven that the "firewall" between traditional banking and the shadow sector is effectively gone. In 2026, financial stability is no longer just about having "strong banks"; it is about the resilience of the pipes connecting those banks to the rest of the world.
The countries that are successfully navigating this transition are those that treat NBFIs not as "outsiders," but as core components of the monetary system. As the IMF's 2025-2026 GFSR concludes:
"Systemic risk in the modern era is not a bank failure; it is a linkage failure. The goal is no longer to prevent NBFIs from taking risks, but to ensure that when they do, they don't take the banking system down with them."