The more comprehensive definition, as adopted by the Financial Stability Board (FSB), i.e., “credit intermediation involving entities and activities (fully or partially) outside the regular banking system” has been globally accepted.
This definition has two important components: First, non bank financial entities or entities outside the banking system that engage in the “bank like” activities of maturity transformation, undertaking credit risk transfer and using direct or indirect financial leverage. Second, activities such as securitization, securities lending and repo transactions that act as important sources of funding for non bank entities.