Commentary

Financial regulators should be wary of private credit

Regulators need to ensure a level playing field between banks and private credit

The rise of private credit poses new questions for regulators Dan Kitwood/Getty Images
The rise of private credit poses new questions for regulators Dan Kitwood/Getty Images Photo: Getty Images

The unstoppable growth of private markets will be one of the defining trends of the new year, with profound implications for the evolving structure of the financial industry.

Tougher regulation of the traditional banking sector in the wake of the financial crisis has driven the growth of private credit. At the same time, it poses an increasingly complex challenge to regulators and central banks because of the uncertain implications for financial stability and its potential impact on the conduct of monetary policy.

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