Bank lending to nondepository financial institutions has been the fastest-growing loan segment since the global financial crisis, according to the FDIC.
Details: In a new report, the FDIC said:
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From 2010 to 2024, outstanding balances of bank loans to NDFIs, reported quarterly on call reports, rose at a compound annual growth rate of 21.9%, almost three times as high as the next-fastest-growing segment.
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More than half of bank lending to NDFIs is to credit intermediaries, and about a quarter is to private equity funds.
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The NDFI share of the financial sector has not grown since 2000, but the composition of NDFI assets has shifted.
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Bank lending to NDFIs have lower delinquency rates than similar loans to businesses not secured by real estate.