Bank of England Warns of Risk From Rise of Non-Bank Players
- Financial Stability Report examines March’s ‘dash-for-cash’
- Leverage, liquidity and pro-cyclical behavior concern BOE
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The Bank of England highlighted the potential risk of non-bank players in amplifying volatility following an analysis of the ‘dash-for-cash’ in financial markets in March as the Covid-19 crisis swept the globe.
The Financial Stability Report noted the rise of non-banks, including big investors like pension funds, investment funds like real estate investment trusts and money market funds, as holding key roles in financial stability. Had central banks not intervened in March, the outcome could have been much worse, according to the report.