Non-bank financial institution
A non-bank financial institution (NBFI) is a financial institution that does not have a full banking license or is not supervised by a national or international banking regulatory agency. NBFIs facilitate bank-related financial services, such as investment, risk pooling, contractual savings, and market brokering.[1] Examples of these include insurance firms, pawn shops, cashier's check issuers, check cashing locations, currency exchanges, and microloan organizations.[2][3][4] Alan Greenspan has identified the role of NBFIs in strengthening an economy, as they provide "multiple alternatives to transform an economy's savings into capital investment [which] act as backup facilities should the primary form of intermediation fail."[5]
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[edit] In Asia
According to the World Bank, approximately 30% total assets of South Korea's financial system was held in NBFIs as of 1997.[6] In this report, the lack of regulation in this area was claimed to be one reason for the 1997 Asian Financial Crisis.
[edit] In the United States
In 1996, the NBFI sector accounted for approximately $200 billion in transactions in the United States.[7]
[edit] See also
[edit] References
- ^ Carmichael, Jeffrey, and Michael Pomerleano. Development and Regulation of Non-Bank Financial Institutions. World Bank Publications, 2002, 12.
- ^ Non-Bank Financial Institutions:A Study of Five Sectors
- ^ NZ Financial Dictionary, http://www.anz.com/edna/dictionary.asp?action=content&content=non-bank_financial_institution
- ^ Legal Service Commission, Law Handbook Online, "Non-bank financial institutions" http://www.lawhandbook.sa.gov.au/ch07s05s06s03.php
- ^ FRB: Speech, Greenspan - Do efficient financial markets mitigate crises? - October 19, 1999
- ^ Carmichael, Jeffrey, and Michael Pomerleano. Development and Regulation of Non-Bank Financial Institutions. World Bank Publications, 2002, 19.
- ^ Non-Bank Financial Institutions: A Study of Five Sectors, http://osdbu.treas.gov/cooply.html
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