Beyond growth: Can private credit withstand the test?

What will the Bank of England’s private credit stress test tell us?

In this episode of the Alternative Insight, Andrew Tully and former Bank of England executive director, Paul Sharma, unpack how the test is likely to work, where risks may emerge under pressure, and why manager behaviour in a downturn could matter just as much as headline losses.

During a wide-ranging discussion, three of the topics covered are:

• How the stress test goes beyond portfolio resilience and is designed to test behaviour too, to make sure managers can keep credit flowing into the economy no matter what the market conditions
• How the test is structured to help managers better understand second and third wave effects of a market shock and respond accordingly
• Why the winners in a volatile market are likely to be those managers who maintain underwriting discipline, workout capability and sound judgement.

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