Global shadow banking assets cross $250 trn as watchdog warns on data

By Laura Noonan

 

Global assets in the sprawling shadow banking sector have crossed the $250 trillion mark for the first time, new data from the Financial Stability Board shows, fueling fears of mounting systemic risks from less regulated corners of the financial sector.   

The FSB’s annual global financial monitor shows non bank financial institutions — a group that spans hedge funds, insurers, investment funds and others — had a record $256.8 trillion of assets at the end of 2024, up 9.4 per cent year-on-year. The group now accounts for 51 per cent of total financial assets, similar to its pre-pandemic share.

 

Within non banks, the fastest growth was in trust companies, hedge funds, money market funds and other investment funds, which all posted double digit rates of growth. Banking sector assets, meanwhile, grew 4.7 per cent according to the FSB, which convenes finance officials from 24 jurisdictions.

 

FSB chair and Bank of England Governor Andrew Bailey has previously called out the risks in non banks and said understanding their evolution would be an “important focus” as global watchdogs assess the resilience of the financial system.

 

The FSB lamented the lack of data around the growth of the multi trillion dollar private credit industry, an area that regulators are keenly scrutinizing for signs of weakness amid warnings of vulnerabilities from bank bosses including JPMorgan Chase head Jamie Dimon and UBS chair Colm Kelleher.

 

Officials said they attempted to compile information on eight major jurisdictions — Canada, Germany, Italy, Luxembourg, the Netherlands, Japan, Switzerland and Hong Kong — but found significant gaps in the data available. Those jurisdictions reported just $0.5 trillion of private credit activity, which the FSB said was “much lower than other estimates calculated with commercial data.” 

 

The report said “not all participating jurisdictions were able to provide data.” Some only provided data on part of the industry, such as by only collecting information on private credit funds and not on lending by insurers. 

 

The FSB staff also noted the absence of a standard global definition for private credit and finance which “rendered it difficult to identify private credit entities in statistical and regulatory reports” The FSB’s 2026 work programme includes addressing data gaps in private credit.