The Netherlands’ financial markets regulator warned of further turmoil in the $1.8 trillion private credit market after turmoil at some direct lenders.
There have been “incorrect assessments in lending,” Laura van Geest, who leads the Authority for the Financial Markets, said in an interview. “Now you actually see that less with traditional lenders, but more with private credit. So in that sense, bad credit is often a canary in the coal mine.”
The asset class has been rattled in recent months as a few high profile US bankruptcies of private credit borrowers raised questions about underwriting standards more broadly. That has been compounded by concerns that software companies which tapped direct lenders could be disrupted by artificial intelligence.
Van Geest said it’s important to determine whether private credit shops dealt with companies “that weren’t quite as sound” and whether they conducted proper due diligence.
“In a number of cases, private credit is indeed running into trouble,” she said on Monday in Amsterdam. “But that’s mainly in the world outside the Netherlands.”
Most major Dutch banks haven’t specified the extent to which they’re channeling funds to private credit lending, though ABN Amro Bank NV has said it has about €200 million ($234 million) in direct exposure as of the end of 2025.
The AFM has taken a look at the private credit market in the Netherlands, which Van Geest described as “quite modest in scope.”
“But Dutch people naturally like to explore the world, so private credit abroad is also relevant,” she said.
Written by: Patrick Van Oosterom and Nicholas Comfort @Bloomberg
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