CANADA – Here’s why the Bank of Canada is worried about the rise of private credit
The concern revolves around private credit, which doesn’t have a universal definition but broadly involves businesses taking out loans from non-bank lenders including asset managers, insurers and pension funds.
As of the start of this year, the bank estimates that there was a combined value of $500 billion in private lending by Canadian investors and lending to private credit funds by Canadian banks. Growth in private credit is happening “largely outside a regulatory environment,” which poses a bigger risk for investors and Canada’s financial stability……