BoE's Breeden: More research into non-bank lenders needed to prevent potential crises - reports

'Proactive case' for policy action

The Bank of England’s deputy governor Sarah Breeden has said more research into non-bank lenders could help better assess the risks of a "credit crunch", potentially triggered by investment funds and other financial intermediaries.

During a speech earlier today (26 February), Breeden said that a change in the willingness of non-banks, or market-based finance, to lend to corporates, particularly those that are highly leveraged, would have "significant implications" for the real economy.  According to the FT, she told academics and researchers at a Bank of England conference in London that a credit crunch could be "sourced in market-based finance rather than bank lending".  BoE flags challenges of evaluating private credit risks to financial stability In January, the Bank of England said that non-banks account ...