Raise bank equity or keep rolling the dice
Our regulatory reflex since 2008 has been to add complexity and discretion rather than fix the core design
Related reading
UK regulator pushes private credit groups to share more data
Fast-growing market comes under greater scrutiny for potential risks after series of setbacks
We must be mindful of the risks of private credit
The sector remains untested in a severe or prolonged economic downturn
So much of credit securitisation still relies on magical thinking
Rather than financial alchemy, such deals involve mispricing, reduced capital buffers and hidden risks
Separating the signal from the noise in private credit
What matters most is how capital was deployed and underwritten
Private credit’s stale pricing problem
More frequent asset valuations can boost market resilience and investor confidence
There is method in the market’s madness
But it relies on a host of rosy assumptions going in investors’ favour