Private Credit Is Blindsided by Bipartisan One-Two Punch From DC

In the span of just a few hours on Friday, private credit firms found themselves in the crosshairs of lawmakers and regulators on both sides of the aisle in Washington.

First it was Elizabeth Warren, who along with fellow Democratic Senator Jack Reed urged top banking cops in the US to stress test the $1.7 trillion market. They suggested probing credit risks at all banks with at least $50 billion in assets, “with a special emphasis on loans to private credit firms and other non-bank financial institutions.”

Senator Elizabeth Warren, left, and Senator Jack Reed

Photographer: Eric Lee/Bloomberg

Then, in what could be a more consequential move, the Federal ...