Abstract
<jats:p>When economists and policymakers talk about nonbank finance, they usually have in mind activity that takes place outside the banking system in institutions that compete with banks for the provision of financial intermediation services, such as fintech lenders, money market funds, private credit vehicles, insurers, and broker-dealers. A substantial share of U.S. nonbank financial activity, however, takes place inside bank holding companies (BHCs), conducted by nonbank subsidiaries that operate alongside regulated commercial banks under common ownership and integrated management. In this first post of our three-part series, we document the scale of nonbank activity within BHCs and describe the balance-sheet features that, as the remainder of the series shows, make these subsidiaries a vehicle for regulatory arbitrage.</jats:p>