One-Off Hits Threaten Confidence in Private Credit, Bailey Warns

Private credit funds are facing higher risks from one-off hits that could threaten confidence in the wider sector, Bank of England Governor Andrew Bailey warned on Monday.

In a letter to the Group of 20 finance ministers ahead of their meeting later this week, Bailey, who serves as chair of the Financial Stability Board, laid out how the conflict in the Middle East could test the $1.8 trillion global private credit market for the first time as some leveraged borrowers face stress.

“There is a heightened risk that the opacity of these markets could trigger a wider loss of ...