Federal · Fortune Technology
Fed seeks details on U.S. banks' exposure to private credit companies
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The Federal Reserve is asking major US banks for details about their exposure to private credit following a surge in redemptions from the funds and a rise in troubled loans in the industry, according to people with knowledge of the matter.
Key facts
- Blackstone Private Credit Fund had a debt-to-equity ratio of 0.7 times at the end of 2025, while Blue Owl Credit Income Corp.’s was 0.8 times as of Feb. 28
- The questions are one of the strongest signals yet that US regulators are working to get a handle on the scale of the strains in private credit, which has ballooned to an $1.8 trillion industry
- The Fed’s questioning comes as President Donald Trump’s top financial watchdogs seek to loosen rules for Wall Street lending giants
- The Fed questioning comes on top of another initiative at the Treasury Department to question insurers about their exposure
Summary
The queries by Fed examiners are intended to assess the level of stress in the private credit industry and the potential for it to spill over to the wider financial system, said the people, requesting anonymity to discuss the work. Among the queries the Fed has been incorporating into its routine oversight process, the central bank has been seeking detail on the debt private credit funds have taken on from banks. The Treasury Department is also questioning the insurance industry about exposures to private credit, said people with knowledge of those separate discussions.