Overview
- Andrew Bailey warned that private credit and other non-bank activities are large, fast-growing and opaque, with complex cross-border links that are hard to observe.
- The BoE’s exploratory stress exercise, launched in December, focuses on economy-wide spillovers rather than the solvency of individual firms and is expected to report early next year.
- Reported participants in the exercise include BlackRock, Pimco, Rokos, Citadel, Goldman Sachs and JPMorgan Chase.
- Bailey argued there is no trade-off between growth and stability, as the BoE presses for stronger resilience outside the banking perimeter.
- The warnings come as the BoE trims some bank capital requirements and ministers push lighter rules, while Bailey also highlights AI-driven herd behavior and cyber threats as emerging risks.