Bank lending to non-bank financial intermediaries reached $1.7 trillion in early 2026, and private equity funds and business credit intermediaries (including private credit funds and business development companies) are the largest borrowers.

That’s according to a new Federal Reserve Bank of Boston analysis of updated data from “Call Reports,” public quarterly financial filings that U.S. banks must file with regulators.

John Levin, a coauthor of the analysis, said non-bank financial intermediaries, or NBFIs, are companies that provide some financial services, such as lending and investing. But unlike banks, they do not take deposits, and they aren’t subject to the same regulations as banks. Examples include mortgage companies, short-term consumer lenders, and investment funds.

Levin, a senior markets specialist at the Boston Fed, said that bank lending to NBFIs has been increasing over the past several years.

“The data shows us that banks are lending to these intermediaries, which then lend onward to households and businesses,” he said. “So, a customer might be borrowing from an intermediary, but the intermediary is borrowing from a bank.”

Levin added that it’s important to continue monitoring the interconnections between banks and NBFIs as the financial system evolves.

Bank loans to private equity, business credit intermediaries top $800 billion

The analysis is called “Bank Lending to Non-Bank Financial Intermediaries: Insights from Enhanced Call Report Data.” Levin, who works in the Boston Fed’s Supervision, Regulation & Credit department, coauthored the note with Boston Fed senior analysts Kelcey Talbi and Isabel Leigh.

The authors looked at Call Report data from the end of 2024 to early 2026. Call Reports were changed in 2024 to require more specific information about banks’ lending practices, and they now include more details about banks’ credit lines to NBFIs, types of loans, and total balances of delinquent loans made to NBFIs.

The authors found that banks’ total “drawn and undrawn” loan commitments to NBFIs stood at $2.7 trillion as of early 2026, $1 trillion more than researchers could have inferred before the 2024 reporting changes. That’s because Call Reports only included data about “drawn” loan amounts prior to the changes.

A loan commitment represents the maximum amount of money a bank has committed to loaning to an NBFI. But in practice, the NBFI may only be using a portion of the overall loan maximum.

For example, a bank may have a total loan commitment of $10 million to a financial company. But the company may only be using, or have “drawn,” $3 million of that committed amount at a given time. That would leave $7 million in “undrawn” loan commitments that the company could potentially use.

The researchers found that NBFIs were actively borrowing $1.7 trillion from banks as of early 2026 – up $500 billion, or about 40%, since late 2024. They noted that this increase reflects both the new reporting instructions – which caused banks to reclassify some pre-existing loans – and actual loan growth.

They also found that private equity funds and business credit intermediaries are the largest borrowers from banks, with $1.3 trillion in total loan commitments. Of that $1.3 trillion, private equity and business credit intermediaries are actively borrowing more than $800 billion as of early 2026.

Most of the lending to NBFIs is driven by the eight largest banks in the U.S., called the “global systemically important banks.” The authors said these types of loans are growing both in dollar terms and as shares of the banks’ total loan portfolios.

Loans to NBFIs currently make up about 20% of global systemically important banks’ total outstanding loans, up from 9% in 2020. Large regional banks – those that have more than $100 billion in assets but are not considered global systemically important banks – are also key lenders to NBFIs.

Read the full analysis on bostonfed.org.