Private Credit Risks Rise as Regulators Warn Over Financial System Exposure

Global regulators have warned that private credit risks are increasing as links deepen between private credit firms, banks, insurers, asset managers and private equity groups.

The Financial Stability Board said the market was valued at between USD1.5tr and USD2tr in 2024.

The watchdog highlighted rising defaults, limited transparency, liquidity mismatches and the retailisation of private credit as key concerns.

While direct bank exposure remains limited at below 0.5% of total assets, regulators warned that deeper interconnections across financial institutions could amplify market stress.