How severe is banks’ exposure to private credit?

While aggregate bank exposure to private credit is low, some individual lenders may have concentrated risk

by Barbara Pianese

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How severe is banks’ exposure to private credit?

Image: Nathan Laine/Bloomberg

Private finance can overlap with banks in ways regulators are still assessing. Global private finance, which includes both private equity and private credit, has seen a rapid expansion, with annualised growth of nearly 18 per cent since 2017, according to the International Organization of Securities Commissions’ September 2023 report, Emerging Risks in Private Finance.

This growth has occurred as banks have retrenched from the credit arena following the tightening of banking regulation.

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Barbara Pianese

Barbara Pianese is the Latin America editor at The Banker. She joined from Mergermarket, where she spent four years covering mergers and acquisitions across Europe with a focus on the consumer sector. She holds an MA in International and Diplomatic Affairs from the University of Bologna having studied in Brazil and France as well.