CFO Slice

U.S. regulators including the SEC, Treasury Department, and Federal Reserve are stepping up oversight of the rapidly growing $3tn private credit market, amid rising investor concerns, fund withdrawals, and questions over potential systemic risks. The SEC has launched multiple early-stage investigations into large private credit managers, focusing on loan valuations, adherence to disclosed investment policies, and potential conflicts in how loans are allocated across different funds, while also considering proposals to require more detailed data from the sector. At the same time, the Treasury and banking regulators are gathering information on leverage, funding structures, and banks’ exposure to private credit, with estimates suggesting total lending exposure of $410bn to $540bn. Although regulators have not yet sounded alarm over systemic risk, recent investor withdrawals exceeding $20bn, coupled with limited transparency and weaker inflows, have heightened scrutiny of the sector’s resilience, even as industry executives and major banks maintain that risks remain contained and unlikely to spill over into the broader financial system.