Global Lenders Risk Capital Hit From Non-Bank Stress, IMF Says

Banks could suffer a “significant” hit to their capital if cracks appear in other parts of the global financial system such as hedge funds and alternative asset managers, the International Monetary Fund warned on Tuesday.

In its semi-annual financial stability outlook, the IMF highlighted the increasing entanglement of traditional lenders with so-called non-bank financial institutions, a diverse group which also includes insurers and now accounts for around 50% of financial assets. European lenders would be the most exposed, the fund said.