Euro-area lenders count on financial firms from outside of banking for about 14% of their funding — underlining how the industry is exposed to potential turmoil in sectors that aren’t subject to strict regulatory oversight.
Unsecured deposits make up the largest part of those liabilities, followed by debt securities and repo funding, European Central Bank researchers said in a report published Tuesday. The share of funding from such firms is higher and more diversified for larger banks than for smaller ones, they said.
Read More : European lenders discovered to rely on shadow banks for 14% of their funding