FSB Report: Global Shadow Banking Assets Break $250 Trillion for the First Time, Regulatory Vacuum Raises Systemic Risk Concerns

The Zhitong Finance App learned that the latest data from the Financial Stability Board (FSB) shows that the assets of the global shadow banking system have broken through the $250 trillion mark for the first time, heightening concerns about the increasing systemic risks that may be brought about by regulatory grey areas in the financial sector. According to the FSB's annual global financial monitoring report, by the end of 2024, the total assets of non-bank financial institutions (covering hedge funds, insurance companies, investment funds, etc.) reached a record 256.8 trillion US dollars, an increase of 9.4% over the previous year. This group currently accounts for 51% of total financial assets, which is roughly the same share as before the pandemic.

Among non-bank financial institutions, the fastest growing ones are trust companies, hedge funds, money market funds, and other investment funds, all of which have reached double-digit growth rates. Meanwhile, banking assets grew by 4.7%, according to FSB data.

FSB Chairman and Bank of England Governor Bailey has previously pointed out the risks of non-banking institutions and said that understanding their evolution will be an “important focus” for global regulators when evaluating the resilience of the financial system.

The FSB regrets the lack of relevant data on the growth of the trillion-dollar private credit sector. Regulators are watching closely for signs of weakness in the sector, as bank executives, including J.P. Morgan CEO Jamie Dimon and UBS Chairman Colm Kelleher, have issued warnings about the sector's fragility.

FSB officials said they tried to gather information on eight major jurisdictions: Canada, Germany, Italy, Luxembourg, the Netherlands, Japan, Switzerland, and Hong Kong, China, but found significant gaps in the available data. These jurisdictions reported only $0.5 trillion in private credit activity, a figure the FSB said was “far below other estimates calculated using commercial data.”

The report notes that “not all participating jurisdictions are able to provide data”. Some jurisdictions only provide data for some industries, such as collecting information on private credit funds and not insurance company loans.

FSB staff also pointed out that the current lack of a global standard definition of private credit and finance “makes it difficult to identify private credit entities in statistical and regulatory reports.” The FSB's 2026 work plan includes addressing data gaps in private credit.