Australian Regulator Plans Stress Test on Private Credit Risks.

Australia's banking regulator, the Australian Prudential Regulation Authority (APRA), plans to conduct a stress test on the nation's financial sector to gain more insight into the impact of private credit capital flows on other market segments. Private credit is a growing area in financial markets and APRA aims to increase transparency in this area due to concerns about its opaqueness. The agency will conduct a cross-industry stress test to track the linkages between different sectors and the flow of private credit. APRA's focus on private markets aligns with increased scrutiny from the Australian Securities and Investments Commission. Private credit accounted for over 10% of Australia's corporate debt market in 2023, which APRA considers significant. The regulator is also examining the exposure of Australia's $4 trillion pension pool to private credit. [Extracted from the article]