Where the next stress starts: the RBI and the Bank of England look outside the banks
Serguey Asael Shinder2 min readThree central bank speeches this week, two in London and one in New Delhi, start from the same observation: the risks that worry supervisors now sit mostly outside the banks they were built to supervise.
The diagnosis. Reserve Bank of India Governor Sanjay Malhotra listed five global risks on 3 October: high public debt, AI-related valuations, leverage at hedge funds, option sellers, ETFs and other non-banks, private credit and AI-amplified cyber risk. He warned that the next crisis may not start in a bank, or even in finance. In London on 1 October the Bank of England's Nathanaël Benjamin described the same shift in the gilt market: hedge funds have moved from net lenders to net borrowers of cash in repo, and their borrowing has grown alongside the cash-futures basis trade.
The data problem. Both say the binding constraint is information. Malhotra called data on non-banks, interconnected exposures and cross-border positions fragmented, and named better data one of his five priorities. Benjamin argued that the Bank of England's advantage is being able to combine transaction, fund and supervisory data, and said the Bank now publishes aggregated repo data in its Financial Stability Report so that market participants can benchmark their own positions.
The tools. Here the two diverge, because their markets do. Malhotra described India's private credit market as still small and its non-bank lenders as well capitalised, with an average capital ratio of 24.6% against 15% required, and stressed the RBI's macroprudential record, such as higher risk weights on unsecured consumer credit in 2023. Benjamin's toolkit is aimed at a deep, leveraged repo market: wider central clearing, which Bank researchers estimate could have cut dealer exposures in 2020 by 40% to 60%, minimum haircuts where competition has pushed them towards zero, and cross-margining. Proposals are due in early 2027.
The new assets. The third speech, by the Bank of England's Sasha Mills, was about growth rather than risk, but it lands on the same principle Malhotra closed with. He said innovation is sustainable only if it preserves settlement finality and the singleness of money; she said central bank money remains the anchor for that singleness, and announced a live service in 2028 to let tokenised platforms settle in it.
What it means
None of the three announced a policy change, and each was one official speaking. Read together, they show where the supervisory effort is going: data on who holds leverage outside the banking system, rules for how that leverage is financed, and a settlement anchor for new forms of money. The difference is pace. India describes those risks as global and its own exposure as limited; the Bank of England has set a date for proposals in its own market.