Head of IMF says risks in private credit market keep her awake at night

Kristalina Georgieva urges vigilance over ‘very significant shift of financing’ after collapse of Tricolor and First Brands

The head of the International Monetary Fund has admitted that worrying about the risks building up in non-bank lending markets keeps her awake at night.

Kristalina Georgieva on Thursday urged countries to pay more attention to the private credit market, after the failure of the sub-prime auto lender Tricolor and the car parts supplier First Brands.

Speaking at the IMF’s annual meeting in Washington DC, Georgieva said the fund was concerned about the “very significant shift of financing” from the banking sector to non-bank financial institutions (NBFIs).

Those NBFIs are not regulated as closely as the banking sector, she pointed out, meaning the world could end up in “a difficult place” if the private credit sector continued to grow significantly and the global economy then weakened.