ESRB publishes NBFI Risk Monitor report
The European Systemic Risk Board (ESRB) has published the 2025 edition of its EU Non-bank Financial Intermediation (NBFI) Risk Monitor. The report provides an overview of cyclical and structural vulnerabilities in the non-bank financial sector, with a focus on leverage, liquidity mismatches and interconnectedness. These vulnerabilities are observed across undertakings for collective investment in transferable securities (UCITS), hedge funds, real estate investment funds (REIFs), other financial institutions (OFIs) and cryptoasset markets. The ESRB notes that, in 2024, total assets of investment funds and OFIs increased to €50.7trn, exceeding the size of the banking sector. The report warns that ongoing macroeconomic challenges and heightened market volatility could amplify cyclical risks to the stability of the EU financial system due to structural vulnerabilities in NBFI.