Increasing loans to non-bank financial groups in the United States increases systematic risk

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Bank loans to the US Procurement and Private Credit Groups helped non-banking financial institutions increase loans to a steep increase, even as the relations between the relations between the two sectors can be a systematic risk.

According to a report, non-bank loans of banks reached about $ 1.2 billion by the end of March Fitch ratingsThe 20 percent increase is managed by giving credit to the private capital industry. Trade loans increased by only 1.5 percent in the same period.

The growth is like regulators from the fast-growing private credit sector of the market, which is a fast-growing private credit sector to the private capital and fast-growing private credit sector, which controls the rapidly growing. Regulators asked banks to report more about their relations with the so-called NBFI to receive a better review of the sector.

Fitch information shows that bank loans to NBFIS have since the start of the pandemia, about $ 600 million in the end of 2019.

This turns private credit companies to the most important customers by providing the arm in direct competition and return to banks. Banks have complex and layered relations with purchasing groups that manage the largest private loan companies.

Borrowers, a source of personal credit funds and direct lenders, are usually risky and more arms. Some of these loans are made with money taken from banks, there are concerns that a bad loan can be bleeding in a wider financial system.

In the Fitch report, a decline in the private credit sector is less likely to have financial stability for the largest banks. ” However, let the risks complete the risks and “more difficult to measure second order effects.”

The IMF warned the global financial stability report last month that banks can make a loan to NBFIs “more susceptible to the level of high levels of interaction.” At the end of last year, more than 40 percent of private lenders have a negative free cash flow in the end of the last year, before three years ago.

Most of the exposure Nbfis JPMorgan is concentrated between the 13 banks, including Chase and Wells Fargo. Categories include mortgages, business and consumer loans, as well as other loans to non-private financial institutions, as well as private capital funds and deposits.

US banks recently began to break credit books with active classes in quarterly reports with the Federal Deposit Insurance Corporation.

JPMorgan, lending in the last quarter in the last quarter, borrowed a “other” between the largest banks in the borrower and did not purchase a “other” for those who do not have the bank. However, America’s largest bank, since then, gave more information about private loans and private capital loans and funds.

“Solid growth in non-banking banks, as soon as possible monitoring of the loan increases in the loan, caused assets that negatively affect the banks than banks,” the report was closed. However, it added that exposure to non-bank banks is usually better than to give to the main borrowers.