FSB warns of rising risks in private credit sector
The FSB warns that deepening links between private credit and banks create systemic risks. Rising defaults and low transparency hinder global market oversight.
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The Financial Stability Board warned on Wednesday morning that the private credit market, estimated at $1.5 trillion to $2 trillion, faces rising defaults and deepening interconnections with traditional banks. The sector could reach $3.5 trillion according to the Alternative Investment Management Association. Investors face liquidity risks and opaque underwriting standards as retail participation reaches 13% of total assets under management.
