Amid strong growth in traditional financial assets during the first phase of the pandemic, the role of the shadow banking sector actually retreated, according to the Financial Stability Board (FSB).

The global policy group issued a status report on so-called “non-bank financial intermediation,” which includes investment funds, pension funds, insurers and other non-banks. That report found the share of global financial assets declined for those entities, even as global financial assets soared 10.9% in 2020 to $468.7 trillion (all figures in U.S. dollars).

For the shadow banking sector, assets expanded more slowly by 7.9%. And, as a result, that area’s share of total financial assets slipped to 48.3% by the end of 2020 from 49.7% in 2019.

The strong growth in global financial assets “was mainly driven by banks and central banks, which grew at their highest rate since the 2008 global financial crisis,” the FSB said, noting that was attributable to the pandemic era’s unprecedented government support and the rapid expansion of bank balance sheets.

The decline in the share of total assets accounted for by shadow banks also marked the largest drop for that group since the financial crisis.

Additionally, the interconnectedness between banks and the non-bank sector decreased slightly in 2020, the FSB reported, adding that indicators of systemic vulnerability in the shadow banking sector were largely stable in 2020 despite market volatility.

“Largely unchanged measures of credit intermediation, maturity and liquidity transformation and leverage highlight the rapid response and impact of official sector intervention in the wake of the March 2020 market turmoil,” the report noted.

Nevertheless, in the wake of the pandemic, the FSB said that it will consider further improvements to its oversight as part of ongoing efforts to “enhance the resilience” of the shadow banking sector, and to identify the build up of systemic risks.

Additionally, the FSB put out a call for papers on systemic risks in shadow banks ahead of a conference — scheduled for next June — that will help the group develop its approach to the sector.