Non-bank financial intermediaries both complement and compete with commercial banks, forcing them to be more efficient and responsive to customers' needs. Especially, pension funds and other institutional investors that mobilize large long-term financial resources can act as countervailing forces to the dominant position of commercial banks. Non-bank financial intermediaries (NBFIs) comprise a mixed bag of institutions, ranging from leasing, factoring, and venture capital companies to various types of contractual savings and institutional investors (pension funds, insurance companies, and mutual funds). The common characteristic of these institutions is that they mobilize savings and facilitate the financing of different activities, but they do not accept deposits from the public.NBFIs play an important dual role in the financial system. They complement the role of commercial banks by filling gaps in their range of services. But they also compete with commercial banks and force them to be more efficient and responsive to the needs of their customers. Most NBFIs are also actively involved in the securities markets and in the mobilization and allocation of long-term financial resources. The state of development of NBFIs is usually a good indicator of the state of development of the financial system.Vittas focuses on contractual savings institutions, namely pension funds and life insurance companies, that are by far the most important NBFIs. He also offers a brief review of the role and growth of other NBFIs, such as leasing and factoring companies, as well as venture capital companies and mutual funds. Vittas covers developments in selected countries in different regions of the world. He also examines the recent growth of NBFIs, especially contractual savings institutions and securities markets, in Egypt. Vittas discusses the necessary regulatory and other policy reforms for promoting NBFIs - in particular, the openness to international markets and foreign presence that is essential for the transfer of skills and technologies.This paper - a product of the Development Research Group - is part of a larger effort in the group to study non-bank financial intermediation.