The IMF says the rise of non-bank financing is playing an important role in the global financial system and has rendered monetary policy more powerful.

In its Global Financial Stability report, the IMF says the financial market has been changing considerably based on ongoing innovations and changes in business models. The IMF believes non-bank financial institutions are more responsive and flexible in adjusting their position given the rising uncertainties of the global economy. The IMF says governments should take into account the rise of non-bank finance in their monetary policy-making.