Where Do Banks End and NBFIs Begin?

Viral V. Acharya; Nicola Cetorelli; Bruce Tuckman

doi:10.1093/rcfs/cfag012

Where Do Banks End and NBFIs Begin?

Viral V. Acharya¹; Nicola Cetorelli²; Bruce Tuckman³

¹ Stern School of Business, New York University, CEPR, ECGI, and NBER · ² Federal Reserve Bank of New York · ³ Stern School of Business, New York University

The Review of Corporate Finance Studies 2026

Abstract Nonbank financial intermediaries (NBFIs) have grown significantly relative to banks. We argue that this growth reflects a transformation of the activities and risks of banks and NBFIs, driven at least in part by changes in bank regulation. We document through new regulatory data, case studies, and empirical analyses that banks remain special as providers of both routine and emergency liquidity to NBFIs and that the sectors have become increasingly interdependent. We discuss some potential regulatory responses, including considering the two sectors holistically and exploring new ways to internalize the costs of systemic risk arising from bank-NBFI interconnectedness. (JEL: G01, G21, G23, G28)

DOI: 10.1093/rcfs/cfag012
Language: en
Export: BibTeX
Sources: openalex crossref