BAKU, Azerbaijan, April 5. Nonbank financial intermediaries (NBFIs), including pension funds, insurers, hedge funds and others play a key role in the economic growth of the global financial system, Trend reports citing International Monetary Fund (IMF).
According to IMF, an increase in the refinancing rate by regulators in the US and Europe is an indicator of elevated financial vulnerabilities.
Risks in the global financial system could intensify in the coming months amid the continued tightening of monetary policy globally, IMF said.
Besides, according to IMF, the mentioned NBFIs, play a key role in the global financial system by providing financial services and credit and thus supporting economic growth.
IMF also noted that the growth of the NBFI sector accelerated after the global financial crisis, accounting now for nearly 50 percent of global financial assets. The smooth functioning of the nonbank sector is vital for the financial stability of the global economy.
IMF further stressed that high levels of interconnectedness among NBFIs and with traditional banks can amplify financial stress.
Concerns about fiscal outlook are leading to a sharp rise in sovereign bond yields that, in turn, leads to large losses in defined-benefit pension fund investments, concluded IMF.