BOE’s Bailey Warns ‘Alarm Bells’ Ringing in Private Credit

The Bank of England warned of parallels between the $1.7 trillion private credit boom and the subprime debt crisis, as UK officials confirmed plans to subject the market to stress tests.

BOE Governor Andrew Bailey told a Parliament committee on Tuesday that “alarm bells” were ringing in the sector. He cited conversations with industry figures who assured him that “everything was fine in their world, apart from the role of the rating agencies,” in an echo of the confusion over the quality of debt in subprime debt securitizations almost two decades ago.