Credit risk is migrating beyond the traditional banking system into a sprawling network of funds, insurers, and lenders, with no single authority able to see the whole picture. The challenge facing policymakers is to ensure that risks remain visible as they shift into corners of the financial system not designed to absorb them.
STANFORD—Private credit has become a major source of financial anxiety, reflecting growing concerns about rising defaults, tighter liquidity, and the entry of retail investors into a market designed for institutions.