Head of IMF says risks in private credit market keep her awake at night
The head of the International Monetary Fund has admitted that worrying about the risks building up in non-bank lending markets keeps her awake at night.Kristalina Georgieva on Thursday urged countries to pay more attention to the private credit market, after the failure of the sub-prime auto lender Tricolor and the car parts supplier First Brands.Speaking at the IMF’s annual meeting in Washington DC, Georgieva said the fund was concerned about the “very significant shift of financing” from the banking sector to non-bank financial institutions (NBFIs).Those NBFIs are not regulated as closely as the banking sector, she pointed out, meaning the world could end up in “a difficult place” if the private credit sector continued to grow significantly and the global economy then weakened.“This is why we are urging more attention to the non-bank financial institutions,” Georgieva told reporters, suggesting there should be more oversight of the sector.
“You are asking the question that keeps me awake every so often at night,”First Brands and Tricolor had both been backed by private credit within the so-called shadow banking sector, which is not directly regulated and is not forced to disclose the level of risks on their books,On Tuesday, the head of JP Morgan, Jamie Dimon, warned that more “cockroaches” could emerge from the private credit industry,“My antenna goes up when things like that happen,I probably shouldn’t say this but when you see one cockroach, there’s probably more.
And so everyone should be forewarned at this point,” Dimon said.Georgieva said the IMF was being “very watchful”, but argued that “so far, not that many cockroaches” had been spotted.She said she was encouraged that countries across the globe had better policy frameworks than were in place before the global financial crisis of 2008, while “systemically significant economies” had accumulated massive reserves to cope with problems.But, she cautioned that many countries had exhausted their fiscal buffers, meaning they had little budget headroom to handle a financial crisis, while central banks were still battling inflation, and she urged vigilance over the non-bank sector.“In this environment, of course, the security blanket is covering us, but maybe we have a foot out in the cold.
We have to be vigilant.What do we do? We watch it very carefully,” Georgieva said.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionShe also cited the “stretched valuations” in the stock market as a concern, in the event that the enthusiasm about AI does not pay off, or its benefits take too long to arrive.Back in June, BlackRock predicted that the private credit sector’s assets under management would grow to $4.5tn by 2030, up from an estimated $3tn today.
BlackRock’s Amanda Lynam and Dominique Bly said there was an “expanding addressable market” of investors and borrowers for private credit.“Indeed, private credit has evolved from an asset class that was best placed to accommodate niche financing solutions, or lending to smaller, middle-market borrowers, to a sizeable, scalable, stand-alone asset class,” they added.Earlier this week, the IMF warned that the growing exposure to NBFIs was generating concentration risk among some banks in the US and Europe.The fund is concerned that banks are increasingly lending to private credit funds because these loans often deliver higher returns on equity than traditional commercial and industrial lending, thanks to the lower capital requirements allowed by their collateral structure.It also warned US stock markets – which have rallied during the AI boom – were at risk of a “sudden, sharp correction” while government bond markets were under mounting pressure.
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Creative Australia awards Khaled Sabsabi $100,000 grant months after dumping from Venice Biennale
Creative Australia has awarded a $100,000 grant to artist Khaled Sabsabi, months after he was controversially dumped and then reinstated by the federal arts body as Australia’s representative for the 2026 Venice Biennale.The grant – one of 16 made under Creative Australia’s Visual Arts, Craft and Design Framework – will fund the creation of a new body of work for a solo exhibition opening in March 2027 at Adelaide’s Samstag Museum of Art, which will also include Sabsabi’s Venice Biennale work.In August, Sabsabi was also awarded a grant by Create NSW for a major new work in western Sydney.The two commissions represent a silver lining in a tumultuous year for Sabsabi, a Lebanese-Australian artist from western Sydney. In February, he and curator Michael Dagostino were announced as Australia’s representatives for the prestigious Venice Biennale; less than a week later they were sacked, after criticism by the Australian and the then shadow arts minister, Claire Chandler, over Sabsabi’s use of imagery in previous artworks of the 9/11 terrorist attacks and former Hezbollah leader Hassan Nasrallah
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Our first four records had been mostly made in houses in the hills above Los Angeles. August and Everything After was our first major label album, so it was a pretty big deal. Our advance was $3,000 each; I bought a 1971 cherry red VW Karmann Ghia convertible and drove it to LA.I would get up every morning and listen to Pickin’ Up the Pieces by Poco, which is like the Beatles doing country music. I also had this Benny Goodman album that I was listening to a lot – my dad had picked it up as a free giveaway at a Texaco station when I was a kid
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To mark a new exhibition at Tate Modern, leading British-Nigerian cultural figures trace the impact of their heritage on their work, and consider its growing influence on the world stageSome primal energy was unleashed among Nigerian artists in the years leading up to independence. The century-long reign of colonialism was nearing its end and the people of Nigeria, with its over 300 tribes, its ebullient energy, were poised for a new future in which they would determine the shape and context of their lives.And the people who most articulated that double position, that paradox of modernity and tradition, were artists in all their stripes. Artists across the country, in constant dialogue with one another, created works that evoked their traditions but in a contemporary context. Artists such as Yusuf Grillo in the north, Bruce Onobrakpeya from the midwest, Ben Enwonwu from the east and Twins Seven Seven from the west were remaking the dream of art in a rigorously Nigerian context
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