Remarks by Under Secretary for Domestic Finance Nellie Liang at the European Central Bank - Federal Reserve Bank of New York Workshop on Nonbank Financial Institutions

As Prepared for DeliveryThank you for the opportunity to speak at this conference today.[1] It’s a terrific program on timely questions, and I am delighted to be part of it.Since the global financial crisis (GFC), the risks of nonbank financial intermediaries (NBFIs) and what to do about them have become increasingly important. In the United States, while credit provided by NBFIs has been growing for decades, it started to grow more quickly than bank credit after 2012 and is now sizable, exceeding on-balance sheet bank credit.[2]In addition, the realization that microprudential regulation and investor protection are not sufficient to ensure financial stability and prevent another financial crisis has raised critical questions about how to better regulate NBFIs.