The evolution of global bank-to-nonbank networks, 2002–2022: a stochastic actor-oriented analysis

The 2008 global financial crisis (GFC) prompted significant reforms aimed at enhancing banks’ resilience to economic shocks. However, it unintentionally accelerated the expansion of nonbank entities and their transnational linkages with banks. This study examines how bank-to-nonbank (BNB) interactions have shaped global financial networks between 2002 and 2022, revealing the patterns and mechanisms of their evolution. Drawing on casino capitalism and neo-institutional organisational theory, we examine whether BNB interactions produce a multilateral speculative architecture driven by profit-seeking or instead reinforce established interbank (BB) hierarchies shaped by network structural constraints. Using two-stage stochastic actor-oriented models (SAOM) on longitudinal cross-border claims data between 31 Bank for International Settlements (BIS) reporting economies and their connections with another 198 counterparties, we model the co-evolution of global BB and BNB networks. The results show that BNB interactions tend to reinforce rather than transform existing global financial hierarchies. The interconnections between banks and nonbanks are shaped by both endogenous network structure effects, such as reciprocity and triadic clustering observed in the established interbank network, and exogenous regulatory conditions at the country level.