New IMF data reveals non-banks drive capital flows when global risks rise
Evidence can be used to analyse how changes in industry mix can impact capital flow volatility, researchers say
The sensitivity of capital flows to global risk is driven more by non-bank financial institutions than banks, a paper published by the International Monetary Fund finds.
Yuko Hashimoto and Signe Krogstrup examine the role of both types of institutions’ balance sheets and risk management practices in driving capital flows during periods of heightened global risk. They use new data collected by the IMF.
Portfolio adjustments in non-banks’ foreign exposures are the primary sources of capital
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