Hedge funds flag growing private credit risks as Fitch’s default rate hits a record 6.3%
About a third of US private credit loans have gone to software companies, and debt maturities in 2027 and 2028 add to fears of strain.
Financial Regulation
Blackstone tells investors Anthropic may not secure an investment-grade credit rating, even after its planned November listing
Blackstone’s view on Anthropic’s debt comes as the company prepares to go public during the week of 16 November amid an AI selloff.
High Treasury yields push US banks to weigh selling bond portfolios as Basel III rules near
PNC said it is factoring in capital rules that are “just around the corner” as it reviews its AOCI holdings, as unrealized losses threaten buybacks.
Wall Street banks court Democrats to lock in Bowman’s 4.8% cut to big-bank capital
A Fed proposal would cut big-bank capital by 4.8%, and lenders want Democratic support for a change backed by a Trump-appointed majority on the Fed’s board.
SEC puts AI risks and private fund valuations at the centre of its fiscal 2027 exam priorities
The Securities and Exchange Commission said examiners will focus on private funds, private credit and complex strategies as private credit managers face a wave of redemption requests.
Banks find unauthorized AI agents inside customer accounts as the comptroller says lenders are ready
Major US lenders are blocking the agents and rewriting their terms of service, while the comptroller of the currency says national banks are well guarded.
The OCC issues its final GENIUS Act rule for stablecoins and reopens the question of rewards
Treasury Secretary Scott Bessent and Comptroller Jonathan Gould called the rule a milestone, while industry groups press the Treasury on the parts of the law still to be written.
Bank of England and FCA pressed over a Google Cloud outage that took UK banking services offline
Google has resolved the failure, which hit Revolut among others, but the central bank is investigating and Parliament’s Treasury Committee wants answers.
The Bank of England examines whether Barclays understated private credit risk
The regulator is looking at how traders classified derivatives tied to illiquid private credit loans after an insider raised concerns.
Bailey and Dimon press for rules on who is liable when an AI agent moves money
The Bank of England governor told the Group of Thirty that policymakers must settle responsibility for autonomous agents, as JPMorgan’s chief raised the same question about payments.
Blue Owl clients ask to withdraw 17% of their money as the ECB plays down private credit risk
A disclosure of redemption requests at Blue Owl’s largest private-credit fund lands in the same week the ECB tells the IMF that private credit alone is unlikely to destabilise the euro area.
UniCredit wins ECB clearance to take control of Commerzbank
The European Central Bank has authorised the Italian bank to cross the 30% shareholding threshold in its German rival, UniCredit said on Thursday.
Bowman says the Silicon Valley Bank review proves US supervision needs rebuilding, and wants other regulators to copy it
The Fed’s vice chair for supervision used the failure review to argue for prioritising what matters most, and criticised global standard setters.
The Bank of England presses banks for bare-metal recovery plans against AI-enabled attacks
Deputy governor Sarah Breeden said the central bank is working with banks on deep cyber-recovery options as AI raises the threat.
UBS maps out contingency plans to leave Switzerland if capital rules tighten
The bank is drawing up plans to move its headquarters out of Switzerland should lawmakers press ahead with tougher capital requirements under the country’s too-big-to-fail laws.
The OCC says the nine largest banks it supervises cut off customers improperly
Comptroller of the Currency Jonathan Gould published findings accusing large lenders of denying service to customers, naming JPMorgan among them.
Treasury fines Bank of America $1.2 billion over anti-money-laundering failures
The Treasury Department said the penalty, its third largest ever, covers years of failures to report suspicious transactions.
The Fed is reorganising bank supervision into five geographic regions
The overhaul puts a regional leader over each new area and is expected to improve coordination with state regulators.
Washington is expected to lean harder on markets whichever party wins the midterms
A scenario sketch circulating among corporate clients argues both parties will face pressure to intervene more in markets after November.
Senate Democrats and a bank lobby challenge two deregulation moves at the OCC
Twenty-one senators want a Community Reinvestment Act rollback withdrawn, while a community bank trade group argues in court that the comptroller’s stablecoin trust charters exceed his authority.
Amex fined $350 million by the OCC and the Fed over money-laundering controls
The Office of the Comptroller of the Currency assessed a $350 million civil penalty against American Express and, with the Federal Reserve, ordered the firm to overhaul its anti-money-laundering programme.
Australia’s regulator halts fundraising at three private credit funds
ASIC stopped three ASCF funds over disclosure as scrutiny of the asset class widens on two continents.
Fed to fold its 12 districts into five supervisory regions
Vice Chair for Supervision Michelle Bowman set out a rewiring of US bank oversight, with asset thresholds next in line.
Fed to fold its districts into five bank supervision regions
Vice Chair for Supervision Michelle Bowman set out a restructuring of how the Federal Reserve examines banks, and said the asset thresholds that sort institutions by size will be revisited next.
New York Fed visits big banks to review private-credit loan exposure
Supervisors have been inside several large banks since spring asking about their lending to private-credit firms and how those loans are valued.
Blue Owl redemption requests ease as the Fed starts asking banks about private-credit marks
Withdrawal requests at the flagship non-traded fund fell to $4.2 billion in the third quarter, from $4.7 billion in the second.
Community bankers sue the OCC to shut crypto’s side door into banking
The complaint asks a court to void the chartering rule and the interpretive letter behind trust charters for crypto firms.
India’s central bank governor names five threats to financial stability
Sanjay Malhotra listed global debt, stretched valuations, leverage, private credit and AI-driven cyber risk, and warned against complacency.
Community bankers sue the OCC over crypto trust charters
The Independent Community Bankers of America has asked a federal court to undo national trust charters granted to crypto firms.
Community bankers sue the OCC over national trust charters for crypto firms
The trade group says the regulator exceeded its authority in granting charters that let crypto firms custody assets nationwide.
Blue Owl holds its 5% redemption cap as investors seek to pull 39% from a tech credit fund
The firm kept quarterly tender caps on two private credit funds while saying redemption pressure has eased from earlier in the year.
Blue Owl caps two private credit funds again as redemption requests climb
Withdrawal requests at two Blue Owl vehicles ran well above the 5 percent cap even as its flagship fund reported slowing outflows.
Fed finalizes bank stress-test overhaul in a win for big banks, with Barr dissenting
The Federal Reserve Board approved final rules that make its annual stress test more transparent and cut the volatility of the capital requirements it produces, over the objection of Governor Michael Barr.
Private credit stress spreads from Australia as US regulators widen retail access
Redemption freezes and write-downs in Australia’s private credit market have drawn global attention and central bank warnings, in the same week the SEC made it easier for retail investors to buy the asset class.
Fed finalizes stress-test overhaul over a governor’s objection
The Board approved changes it says will make the test more transparent and cut the volatility of the capital requirements it produces.
Private credit strains surface as an Australian fund freezes redemptions
Metrics Credit Partners stopped investors accessing some funds as the prudential regulator warned of heightened risk.
Metrics gates $9 billion of private credit funds as the SEC presses on valuations
An Australian manager froze investor withdrawals after a write-down, on the same day US regulators reminded funds and auditors how private assets should be valued.
A Burry-advised short fund takes aim at private credit as defaults hit a record
Minerva Investment Management plans to launch this month, betting that opaque loan books are hiding stress.
Audit forces Australian private-credit funds to halt after valuation cuts
Metrics Credit Partners suspended three listed funds after a delayed KPMG audit cut asset values.
Private credit forms its own association as regulators circle
A $300 billion sector is launching an industry body amid heightened scrutiny, even as fund managers report that redemption pressure is easing.
Private credit redemption pressure eases as withdrawals slow
Retail investors are pulling less money out of non-traded private credit funds and performance has improved, though withdrawal limits and weak inflows persist.
Fed proposes reserve and capital rules for payment stablecoin issuers
Two rulemaking packages would require full backing in high-liquidity assets and set a capital floor for issuers the Board supervises.
UBS revisits leaving Switzerland after parliament votes to tie up capital
Senior leaders have reopened talks about combining with a foreign bank after Swiss lawmakers backed rules that would bind billions of dollars against the bank’s overseas units.
Fed proposes reserve and capital rules that would push stablecoins into Treasury bills
The Board opened comment on two GENIUS Act proposals requiring full backing in permissible liquid assets and setting capital charges for the issuers it supervises.
Private Credit Redemptions Mount as European Regulators Flag the Sector
Apollo’s flagship private credit fund faced another rush for exits in the same week EU supervisors named the asset class a key vulnerability.
Apollo Gates Its Flagship Private Credit Fund for a Third Straight Quarter
Investors asked to withdraw 14.7 per cent of outstanding shares in the third-quarter tender, down from the previous quarter but still far above the fund’s cap.
Australia’s Regulator Halts Private Credit Products and Warns of More
ASIC stopped offers under three private credit products and told the sector to fix governance and valuations or face enforcement.
Fed review says its own supervisors saw Silicon Valley Bank’s weakness and did not act
An independent review commissioned by Michelle Bowman blames a risk-averse supervisory culture, and is being used to frame a rewrite of US bank stress tests.
Morgan Stanley caps private credit withdrawals again as investors ask for the exit
Roughly 11% of a nearly US$7 billion fund was put up for redemption, and the manager is holding to its standard 5% quarterly limit.
Bowman previews a stress-test overhaul and capital rules before year-end
The Fed’s supervision chief says the board will consider final revisions to its stress-test rules in the coming weeks.
Morgan Stanley caps private credit withdrawals again as 11% ask to leave
Redemption requests at the bank’s flagship private credit fund stayed elevated in the third-quarter repurchase offer.
New review says Fed supervisors should have caught Silicon Valley Bank
An outside report commissioned by the Fed’s own supervision chief blames examiners rather than the rulebook.
A second review of Silicon Valley Bank puts the blame on the Fed’s own supervisors
Michelle Bowman says an independent report found examiners knew of the bank’s risks well before it failed, and that social media was not the cause of the run.
Private credit default estimates hit a record as higher rates bite
Fitch raised its private credit default rate to a record 6.3%, and the industry cannot agree on whether the true number is closer to 1% or 19%.
Nobody agrees what the private credit default rate is
Estimates for the same asset class range from about 1% to 19%, depending entirely on who is doing the counting.
US private credit default rate hits a record 6.3%
Fitch’s trailing-twelve-month measure reached a high just as European and US supervisors began asking who is holding the risk.
Private Credit Default Rate Hits a Record 6.3% as Scrutiny Widens
Fitch put the trailing twelve-month default rate at a record level just as regulators, senators and litigators turned their attention to the asset class.
BIS flags the AI rally and hedge fund leverage as the system’s soft spots
The Bank for International Settlements used its quarterly review to warn that AI-driven market momentum is showing signs of vulnerability, and that leveraged non-banks are now central to global markets.
Private credit default rate hits a record as Washington starts asking questions
Fitch says the US private credit default rate rose to a new high in August, on the same day two senators pressed regulators for more disclosure on the asset class.
Private credit defaults reach 6.1% as BlackRock’s redemption pressure eases
Fitch’s default reading and a stalled rally in listed managers sit alongside the first sign that withdrawal demands from the largest non-traded fund are slowing.
Better Markets sues the Fed over Bowman’s bank capital rulemaking
A Washington nonprofit has sued the Federal Reserve and its vice chair for supervision over private contacts with Wall Street banks during an open comment process.
Private credit strains as $100 oil meets climbing Treasury yields
Direct lending is being tested from two sides at once, with input costs rising for leveraged borrowers and the benchmark yield they refinance against moving higher.
China Raises the Listing Bar for Humanoid-Robot Makers
The securities regulator has told banks informally that humanoid-robot companies must show recurring revenue and a path to narrower losses before an IPO is approved.
Block Applies for a National Trust Charter to Custody Bitcoin
Jack Dorsey’s payments company joins an OCC queue in which digital asset filings now make up more than half the applications.
FSB flags private credit and AI-linked valuations to G20 finance ministers
The stability watchdog’s warning lands while a large retail fund is still limiting withdrawals and traded credit vehicles trade at widening discounts.
Bathla Collapse Turns Australia Into Private Credit’s First Real Test
The failure of an Australian builder has put banks, regulators and private credit funds on the same set of loans, and shown how little of it is visible.
Private credit meets its stress test: Bathla’s collapse and a Blue Owl markdown
An Australian builder’s failure and a near-zero markdown on a US retail fund loan are testing an asset class that grew through a decade without a default cycle.