As if to confirm the regulatory focus on the non-bank financial sector that we recently highlighted, the European Commission is consulting on the risks to financial stability posed by, and macroprudential oversight of, the non-bank financial intermediation (NBFI) market, with a response deadline of 22 November. Its scope is broad, covering not only private credit but also real estate funds - it is available here. Three specific “key vulnerabilities” stemming from NBFI are identified, namely:
- Umitigated liquidity mismatches
- The build-up of excessive leverage
- Interconnectedness among NBFI sectors and between NBFI and banks
We are coordinating with other European real estate industry groups with a view to submitting consistent responses, and we would really value member support and participation – if you or a colleague can help, please let Peter know.
