Commercial & Industrial loans from banks are on the decline, and lending to Main Street and consumers from non-bank financial institutions (NFBIs) is on the rise. But here’s the paradox: traditional banks are fuelling this rise of NFBIs by lending capital to what were once their competitors.

While this systemic shift plays out among lenders, there are questions about whether post-global financial crash regulations – such as stress testing and liquidity requirements – are keeping pace with this market as it grows. Could further growth in this $1 trillion market threaten the stability of the wider banking system?

In Episode 73 of The Flip Side podcast, our Global Head of Research Brad Rogoff and Senior High Grade Financials Analyst Pete Troisi debate whether the risks outweigh the opportunities in this evolving market.