Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the risks to private credit and financial stability of the growth of private markets.

Private markets are an increasingly important source of finance for the real economy and have supported growth. However, they also pose new risks, including from the use of leverage, opacity around valuations, and interconnectedness with the wider financial system.

These issues have been a growing area of focus for the Government, the Bank of England and the regulators in recent years. In the most recent remit letter to the Bank of England’s Financial Policy Committee, the Chancellor asked that the Committee continue to consider risks in private markets.

We continue to work closely with the regulators to deepen our understanding of these risks. This includes working closely with the Bank of England on its new System‑Wide Exploratory Scenario, which is centred on vulnerabilities in private markets., and through our membership of the international Financial Stability Board.