Skip to content
dotdock

Banking on Nonbanks

2026

Publication cover

Open publication workspace · Sign in to read the full PDF.

AI-generated summary

1) This paper reveals how banking groups strategically shift lending to nonbank subsidiaries to mitigate the impact of tighter macroprudential policies, highlighting a key channel for regulatory arbitrage and increased bank-nonbank interconnectedness.
2) * Examines the reallocation of corporate credit supply from bank subsidiaries to affiliated nonbank financial institutions (NBFIs) in response to regulatory tightening.
* Quantifies how banking groups can offset over half of the contractionary effects of macroprudential policies by leveraging their NBFI affiliates.
* Investigates the role of domestic versus foreign NBFI subsidiaries and the impact of banking group financial strength on lending behavior.
3) Banking groups, Nonbank financial institutions, Macroprudential policy, Regulatory arbitrage, Credit supply

Check the original publication for accuracy and context.