Systemically important euro area banks may be disproportionately affect by turbulence in the non-bank financial intermediary (NBFI) sector, a pre-released study from the ECB Financial Stability Review found, with the five biggest European banks accounting for around half of total loan and securities exposure.

Europe’s biggest 13 banks also account for around 80% of all euro area banks repo borrowing from NBFIs, with 10% of lenders by size providing 88% of total funding, the study published Tuesday concluded, suggesting elevated concentration risk.

“The materialisation of liquidity and credit risks in the NBFI sector would lead to an outflow of the funding provided by this sector, which primarily holds its liquid assets in the form of bank deposits and short-term securities,” the study's authors concluded. “This could affect bank capital as well as liquidity, assuming these assets are used to support secured funding or margins on derivatives portfolios.”