The possibility that non-banking institutions acquire a central role in credit intermediation is, on the one hand, a prospect that is periodically re-proposed, and on the other, a hypothesis that is constantly denied by the facts. An erosion of the relative weight of banks in the financial sphere has indeed occurred but in parallel with a very pronounced increase in overall financial intermediation. Hence a very significant growth in bank assets.
Between 2002 and 2013, the weight of banks in financial intermediation decreased by about 14 percentage points, but bank assets still increased globally by $35 trillion. In developed economies, the bank credit/GDP ratio has been experiencing an almost permanent growth process for some time. From 62% in 1980 it rose to 79% in 1995, to 112% in 2007, to 118% in 2010. In the fifteen years between the mid-90s and the financial crisis, therefore, the ratio rose by almost 40 percentage points.
Corporate financing is a central topic in considering the possible process of bank disintermediation. At the end of last year, global loans to businesses amounted to approximately $3,9 trillion, recovering after six years the value reached immediately before the outbreak of the financial crisis; over the same period, corporate bonds have increased by 70% to over $1,5 trillion.
However, a recent analysis allows us to glimpse the possibility that the downsizing of the role of banks in terms of business financing is a sought-after result rather than a disintermediation suffered by other types of financial operators. The "banking without banks" hypothesis also calls for consideration of the so-called shadow banking. In terms of systemic risk, this set of institutions remains the cause of possible problems in some countries.
However, in terms of the competitive potential vis-à-vis traditional banking systems, there are signs of its weakening. Information technology continues to propose methods of disintermediation of the traditional banking circuit. The volumes associated with this process are very limited, making it a novelty rather than a financial phenomenon.
Attachments: Focus no. 07-20 February 2015.pdf
