Non-banks' syndicated lending is more concentrated across countries and industries than that of banks and it is more volatile.Non-banks' origination of syndicated loans to non-financial firms grew twentyfold from 1990, to $410 billion in 2019, and represents a sizeable share of the total in most regions and sectors.2 It further investigates the role of non-banks in cross-border spillovers during financial crises. ![]() This special feature provides the first systematic overview of global syndicated lending by non-banks and contrasts it with that by banks. As non-banks extend syndicated loans in a highly procyclical fashion (Fleckenstein et al (2021)) and access to syndicated credit affects firm performance (Chodorow-Reich (2014)), their ubiquitous presence could drive real economy developments. Non-bank lenders represent an important source of funding for non-financial corporates (NFCs) in general (Aramonte and Avalos (2021)) and through syndicated loans in particular (Elliott et al (2019)). The reach of non-banks extends beyond financial market conditions. With the March 2020 market turmoil serving as a case study, substantial efforts have been made to understand how such instability can unfold and what policy measures can mitigate it (Carstens (2021)). While they can contribute to a more diversified and efficient financial system, non-banks can also be a source of instability due to, for instance, liquidity mismatches (Aramonte et al (2021)). The increasing footprint of non-bank financial intermediaries has put them front and centre of policymakers' agendas. During domestic financial crises, they reduce this share further, exacerbating the global transmission of shocks. Non-banks generally grant a smaller share of their new loans to foreign borrowers than banks do. Syndicated loans arranged by non-banks carry a significantly higher spread relative to those by banks, consistent with the pattern that firms borrowing from non-banks are more leveraged and less profitable, ie riskier. Their loan origination, however, is more concentrated by location and sector than that of banks and it is also more volatile. Non-bank lenders are an important source of syndicated credit to non-financial corporates in most regions and industries.
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