The European Banking Authority (EBA), the regulator that conducts stress tests on European Union banks, will take additional steps to predict how strains in non-bank financial institutions (NBFIs), including cryptocurrency-related entities, will affect the lenders, according to the Financial Times.

In an interview with The FT, Jose Manuel Campa, chair of the EBA, stated that the concern over contagion prompted him to “dig further into the links between the banks and other financial companies.” “We are going to do more,” he added. We must understand the entire underlying chain of NBFIs.

According to a FT report, NBFIs control around $219 trillion in assets, which is almost half the global financial assets.

The EBA is already taking steps to combat the stress that crypto could cause on the system. published draft regulations on capital and liquidity requirements for stablecoin issues in November in accordance with the EU’s Markets in Crypto Assets regulation. The EU has also proposed that individuals who own more than 10% of a crypto company be screened for criminal convictions or sanctions. It also told crypto companies they should watch out for customers who use privacy coins or their self-hosted wallets in order to detect potential money laundering.

Campa stated that the EBA performs stress tests every two years on European lenders, and assesses their balance sheet exposures towards non-banks. The report stated that the latest step would be to work closely with the European Systemic Risk Board (ESRB) and Financial Stability Board in order to better understand the impact of a “shadow banking shock” on the system.

Read more: EU Banking Watchdog seeks feedback on draft liquidity and capital rules for stablecoin issuers

Sheldon Reback is the editor.