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Fed asks about US banks' exposure to private credit firms, Bloomberg reports
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Fed asks about US banks' exposure to private credit firms, Bloomberg reports
Apr 10, 2026 4:56 PM

April 10 (Reuters) - The Federal Reserve is asking major U.S. 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, Bloomberg News reported on Friday, citing people familiar with the matter.

The Fed is looking to assess the level of stress in the private credit industry and whether it has the potential to spill into the wider financial system, the report said.

Reuters could not immediately verify the report. The Fed declined to comment.

Private credit firms have been strained by the market's recent downturn. Some investors have retreated from these investments due to worries about valuations and lending standards following a handful of high-profile bankruptcies.

Some major U.S. banks have tightened lending standards, while private funds have capped withdrawals as redemption requests surged in recent months.

The report comes days after the U.S. Treasury Department said it would meet with domestic and international insurance regulators this month to discuss private credit markets as concerns mount over how the $2 trillion non-bank lending sector could affect the wider credit market.

Fed Chair Jerome Powell said last month the U.S. central bank is watching developments in the private credit sector for signs of trouble, but he does not currently see issues there infecting the financial system as a whole. 

St. Louis Federal Reserve President Alberto Musalem also said last month that financial conditions are still "broadly accommodative" and that stress in private credit markets is largely limited to that sector.

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