Non-banks tend to cut lending during crises – BIS paper

Evidence from syndicated lending suggests growth of non-banks could exacerbate crises

The Bank for International Settlements, Basel
The Bank for International Settlements, Basel
Photo: Ulrich Roth

Non-bank financial firms tend to cut lending during crises, worsening bouts of financial turbulence, research published by the Bank for International Settlements finds.

Iñaki Aldasoro, Sebastian Doerr and Haonan Zhou analyse data from global syndicated lending. They estimate around a third of syndicated lenders are non-banks, and their “global presence” has risen since the 1990s to account for around 20% of syndicated lending today.

The authors start by showing that non-banks cut their credit

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