A Bank of England official warns of private credit risks and their potential impact on investor appetite and Britain's financial stability, as non-bank finance grows and private credit increases four-fold since 2015.

A Bank of England (BoE) official warned that private credit risks, with time lags in re-evaluating assets to reflect higher interest rates, could negatively impact investor appetite and jeopardize Britain's financial stability. These risks may become more apparent as non-bank finance, or shadow banking, grows in the sector. With private credit growing four-fold since 2015, the BoE is developing policies to improve transparency in this area, given its links to private equity and the various financial risks involved.

January 29, 2024
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