Reported about 1 year ago
Watchdogs are alarmed by the substantial risk to investors in the private credit market as nearly 40% of funds lack skin in the game, creating incentive misalignment and potential prioritization of profit over investor returns. The $2.1 trillion private credit industry is under scrutiny for lacking manager experience in credit cycles and reporting data to the US Securities and Exchange Commission. Regulators are also worried about shadow banking risks and banks' exposure to off-balance sheet shadow banks interactions, calling for greater transparency and understanding in the sector.
Source: YAHOO