Columbia Study Finds $1.8 Trillion Private-Credit Ratings Understate Risk
Updated
Updated · Bloomberg · Jun 8
Columbia Study Finds $1.8 Trillion Private-Credit Ratings Understate Risk
1 articles · Updated · Bloomberg · Jun 8
Summary
Columbia Business School researchers said ratings used across the $1.8 trillion private-credit market systematically understate investment risk, according to a paper posted online this month.
The finding adds to scrutiny of a fast-growing Wall Street sector whose ratings help support investment decisions and valuations.
US life insurers are a key concern because they have been piling into private credit, raising worries among regulators and analysts about potential risks to policyholders.
The study is not yet peer-reviewed, but it lands as private credit's rapid expansion fuels a bonanza for the financiers structuring the products.