Overview
- The cross-party House of Lords committee published 'Private markets: Unknown Unknowns,' criticizing HM Treasury for what it called a passive approach to monitoring private credit.
- Lawmakers urged granting the Bank of England the authority to gather data on private credit interconnections if its ongoing industry stress test does not provide enough insight.
- The report pressed for faster, regular updates on the BoE’s inaugural stress test, whose final results are scheduled for early 2027.
- The BoE’s exercise cannot compel all firms to participate, many are overseas, and private credit itself is not directly regulated by the central bank.
- HM Treasury said it has increased focus on non-banks and will consider the recommendations, while the committee noted it has seen no evidence of current harm despite recent U.S. corporate failures that heighten concern.