According to a staff report from the Federal Reserve Bank of New York, big banks did cut back their leveraged lending, and nonbank lenders stepped in. According to a staff report from the Federal Reserve Bank of New York, the banks cut their lending Compared to the pre-guidance period, the market share of these institutions in the post clarification period declined by 11.0 and 5.4 percentage points depending on whether it is measured by the number or volume of leveraged loans, respectively. […] the nonbanks that started funding the leveraged loans were in many cases getting financing from the banks that were no longer able to participate in the leveraged loan market. […] that reduction did not lead to a commensurate decline in risk in the banking sector because some of the leveraged lending business migrated to nonbanks which in turn resorted to banks to raise funding for this activity. […] while the guidance achieved its goal of reducing banks’ leveraged lending business, the migration of leveraged loans to nonbanks makes it less clear that the guidance accomplished its broader goal of reducing the risk that these loans pose for the stability of the financial system.