ZURICH, Dec 18 Reuters The Financial Stability Board FSB on Wednesday pitched recommendations for governments to reduce risks around hedge funds, insurers and other nonbank financial intermediaries, which now account for almost half of global financial assets.

The sector of nonbank financial intermediation has grown by around 130 between 2009 and 2023, making markets more vulnerable for stress events, according to the Baselbased FSB, which acts as the G2039;s financial risk watchdog.

This growth comes with an increase in complexity and interconnectedness in the financial system, which, if not properly managed, can pose substantial risks to financial stability, said FSB Secretary General John Schindler.

In its consultation report, the FSB proposed member governments and institutions enhance their focus on nonbanks and ensure they manage their credit risks adequately.

One set of recommendations calls for the creation of domestic frameworks to identify and monitor financial stability risks related to nonbank leverage.

Another group proposes that policy measures be selected, designed and calibrated by governments to mitigate the identified financial stability risks.

A third group deals with counterparty credit risk management, calling for a timely and thorough implementation of the Basel Committee on Banking Supervision39;s revised guidelines.

The FSB also proposed stepping up private disclosure practices in the nonbank sector and addressing any regulatory…