Non-bank financial intermediation: Canada’s submission to the 2024 global monitoring report

Introduction

The global non-bank financial intermediation (NBFI) sector has grown significantly since the 2008–09 global financial crisis. Because of this growth, the Financial Stability Board (FSB) established in 2016 the Non-bank Monitoring Experts Group, which collects data annually from 29 jurisdictions and produces the Global Monitoring Report on Non-Bank Financial Intermediation (GMR) (Financial Stability Board 2024). The GMR summarizes growth in the NBFI sector and key subsectors in each jurisdiction.

The Bank of Canada works closely with Statistics Canada, the Ontario Securities Commission and the Office of the Superintendent of Financial Institutions to compile Canadian data for the GMR.

We share insights from data from 2002 to 2023 that the Bank has collected and submitted to the FSB for inclusion in the GMR.1 Although we provide context for recent developments, we do not present the Bank’s overall assessment of vulnerabilities related to either Canadian NBFI entities or more general activity in core financial markets. The Bank’s Financial Stability Report—2025 contains the most recent assessment of vulnerabilities associated with the NBFI sector (Bank of Canada 2025a).

Key insights from the data

• NBFI assets in Canada grew by 5.7% in 2023—from $12.1 trillion to $12.8 trillion—after declining by 5.5% in 2022. The annual average growth rate has been 6.2% since 2010. The growth in 2023 reflects rising asset valuations across a broad range of markets.
  • Real estate investment trusts was the only type of Canadian NBFI entity whose asset valuations declined. Valuations fell 14% due to high interest rates and falling real estate prices.
  • Money market funds’ assets increased by more than 50% but remain less than 1% of the overall value of NBFI assets.
  • The value share of NBFI assets in the Canadian financial system remained largely unchanged, rising from 60.3% to 60.5%.
  • Outside of NBFIs, commercial banks’ share of financial system assets also remained largely unchanged, rising from 34.2% to 34.6%, while the Bank’s share fell slightly from 2.8% to 2.2%, mainly because of quantitative tightening (Gravelle 2025).
• Assets for the narrow measure of NBFI—which includes entities that engage in bank-like activities—grew by 6.2%. This growth was relatively broad-based, with an increase in every component of the FSB’s narrow measure. About 80% of the assets captured by the FSB’s narrow measure of NBFI consists of investment funds that own credit assets. The value of assets in these funds grew 6.2% due to rising valuations in bond markets.

Developments in the Canadian financial system and non-bank financial intermediation sector

The total value of assets in the Canadian financial system grew from $20.1 trillion to $21.2 trillion between the end of 2022 and the end of 2023, an increase of 5.4% (Chart 1).

Global bond prices rose significantly at the end of 2023 because falling inflation led to broad expectations that central banks would begin cutting rates in 2024. This decline in inflation together with expectations of monetary policy easing led to a decline in bond yields. This trend also occurred in Canadian bond markets. For instance, the yield on 10-year Government of Canada bonds fell from about 4% at the start of October 2023 to about 3% at the end of December 2023 (Bank of Canada 2025b).

Many other assets—notably Canadian equities—grew in value over this period, partly due to expectations of policy easing.

Assets from deposit-taking institutions—mostly commercial banks and credit unions—increased in value by 6.8% between the end of 2022 and the end of 2023.

At the same time, NBFI assets increased in value by 5.7%. As a result, the NBFI share of total assets in the financial system were largely unchanged, rising from 60.3% to 60.5%.

This increase in NBFI assets in 2023 was broad-based, with most types of NBFI entities, including other financial intermediaries (OFIs), seeing a rise in asset valuations. Chart 2 displays the growth and composition of assets held by OFIs. These assets grew by 5.8% in 2023. Money market funds grew 50.3% over the year but still represent only a small share of assets in the Canadian financial system at 0.4%. The only type of OFI that saw a decline in asset value was real estate investment trusts and real estate funds, which fell 14.0%.

Tracking changes in the narrow measure of non-bank financial intermediation

NBFI entities captured by the narrow measure saw the value of their assets as a group grow by 6.2% between the end of 2022 and the end of 2023 (Chart 3). While investment funds were key to this growth, asset valuations increased among all components of the FSB’s narrow measure.

Investment funds continue to make up about 80% of assets in the narrow measure of NBFI in Canada. One of the largest components of investment funds—open-ended mutual funds—saw the value of its assets increase in 2023 despite overall net redemptions by unit holders (Securities and Investment Management Association 2024). Chart 4 shows that most types of investment funds appreciated in 2023. Fixed income funds—the largest single component by assets—grew 7.5% over the year. Some smaller entity types experienced significant value growth, as well:

• money market funds grew by 50.3% to $77.5 billion
• credit hedge funds grew by 18.9% to $165.4 billion
• exchange-traded funds grew by 19.5% to $136.6 billion

The value of assets in mixed mutual funds shrunk slightly.

Finance companies hold 12.8% of the total assets held by entities captured in the narrow measure, making them the second largest component of this group. They recorded growth in assets of 4.3% in 2023 (Chart 5) (Statistics Canada 2025).

Conclusion

In 2023, the value of assets in the Canadian NBFI sector grew by 5.7%, compared with overall global growth of 8.5% (Financial Stability Board 2024). The growth in Canada was broad-based and reflected rising asset prices in Canadian and global financial markets. Every type of NBFI entity rose except for real estate investment trusts. As a result, the share of NBFI assets in the Canadian financial system also rose slightly to 60.5%. In 2023, the narrow measure of NBFI saw its assets rise in value by 6.2%. This increase was also broad-based, with growth seen across all the main categories of the narrow measure.

Appendix: Definitions of non-bank financial intermediation

We follow the definitions for non-bank financial intermediation (NBFI) entities set out in the Global Monitoring Report on Non-Bank Financial Intermediation (Figure A-1) (Financial Stability Board 2024).

The NBFI sector is composed of all non-bank financial entities that engage in some form of financial intermediation. These include pension funds, insurance corporations, financial auxiliaries and many other intermediaries referred to collectively as other financial intermediaries.

Some NBFI entities engage in bank-like activities that involve a significant amount of:

• maturity transformation
• liquidity transformation
• credit transformation

Entities that engage in these activities fall into what the FSB defines as the narrow measure of NBFI (Figure A-2). These entities often provide a valuable alternative to traditional banking by:

• fostering innovation
• enhancing competition
• catering to underserved market segments
• promoting efficiency in the financial system

However, these activities are often associated with financial leverage and represent an important channel through which risk can spread across the financial system.

References

Bank of Canada. 2025a. Financial Stability Report—2025.

Bank of Canada. 2025b. “Selected Bond Yields.” Last accessed April 7, 2025.

Financial Stability Board. 2024. Global Monitoring Report on Non-Bank Financial Intermediation: 2024.

Gravelle, T. 2025. “The End of Quantitative Tightening and What Comes Next.” Remarks delivered at VersaFi, Toronto, Ontario, January 16.

Securities and Investment Management Association. 2024. “IFIC Releases 2023 Investment Funds Report.” News release, Toronto, Ontario, January 31.

Statistics Canada. 2025. “Non-Bank Financial Intermediation, 2007 to 2023.” The Daily, February 14.

Endnotes

Acknowledgements

We thank Statistics Canada, the Ontario Securities Commission and the Office of the Superintendent of Financial Institutions for their expertise and contributions.