The Bank of England on Monday launched a new stress test that will for the first time cover non-banking financial institutions, which played a role in recent UK markets turmoil.

So-called shadow banking institutions -- including hedge funds, pension funds and insurers -- will face a system-wide "exploration exercise" to assess the risks that they pose to stability, the BoE said in a statement.

"The exercise aims to improve understanding of the behaviours of banks and non-bank financial institutions in stressed financial market conditions," it added.

"It will explore how those behaviours might interact to amplify shocks in UK financial markets that are core to UK financial stability."

After the 2008 global financial crisis, central banks imposed regular stress tests on major commercial lenders to test their ability to withstand another sector-wide meltdown and avoid further costly banking bailouts.

The BoE has repeatedly stated that it is satisfied with Britain's top banks.

However, London markets have faced shocks in recent years as a result of the shadow banking sector.

The BoE recently estimated that such institutions represent about half of total assets lent by the global financial system.

Non-banking finance players face less regulation than traditional lenders.

The industry played a key role in UK bond market chaos late last year. (AFP)