The outlook for banks has thus become more uncertain, with liquidity asset quality concerns surfacing. The non-bank financial sector could also see such risks. While this sector has remained resilient during the recent banking sector stress and market volatility, its exposure to  1/3  BIS - Central bankers' speeches  liquidity and credit risks remains high.
If investment funds were to experience any sudden liquidity needs, they could amplify adverse market dynamics via procyclical selling behaviour and forced asset sales, thereby introducing risks to wider financial stability. Strains in the non-bank sector, which is an important source of bank funding, could also give rise to additional banking sector vulnerabilities via liquidity and credit risk spillovers.