Financial regulators should pay more attention to lenders outside the banking sector, such as pension funds, insurance and investment funds. With that warning comes the International Monetary Fund (IMF).

According to the IMF, these lenders outside the banking sector have expanded rapidly since the 2008 financial crisis and account for nearly half of all financial investment. Therefore, problems in these institutions can jeopardize overall financial stability.

Read also | Over $16.5 billion discount on acquisition of Silicon Valley Bank

Because these financial institutions often do not have the same strict rules as banks, they can take on more risks. Tighter supervision should prevent this, according to the IMF. Supervisors should also receive more money and staff for this.

Policy makers must close or narrow gaps in reporting obligations for key data, including the risks companies take in borrowing or using derivatives.

Read also | Credit Suisse shareholders meeting in somber mood

The risks for the financial sector are increasing now that interest rates are rising sharply. In recent years, it has been very cheap to borrow money in Western economies, making it all the more tempting to rack up high debt burdens.

Rapidly rising interest rates also played a role in the bankruptcy of Silicon Valley Bank in the United States. The bank has invested in bonds, which have become much lower in value due to rising interest rates. But the IMF also pointed to the panic that emerged among Britain’s pension funds when British government bonds plummeted last fall following a badly received budget plan.

Read also | ‘ECB blames business sector’

Earlier this week, the European Central Bank (ECB) warned of the risks posed by companies outside the banking sector to financial stability. In particular, this concerns investors in commercial real estate, such as shopping centers or office buildings. According to the ECB, investors invested 1 trillion euros in commercial real estate over the past ten years, which has fallen in value due to higher interest rates. Because of its size, problems in the real estate sector can also spread to other sectors.