Private credit: the silent giant reshaping corporate lending. How could it threaten global financial stability?

Private credit funds have gained substantial relevance in lending activities to middle-market and highly leveraged firms, especially after the post 2008 regulatory tightening on banks. The rapid growth that occurred in the last decades has been driven by low-for-long interest rates, strict banking rules, and strong investor demand. Direct lending vehicles have been reshaping the corporate financing sector while raising important questions about their potential risks. Based on data and information gathered from international institutions, academic studies, and industry reports, the focus of this thesis is to identify and discuss the channels through which private credit could threaten global financial stability. Among the main sources of concern are the opacity of disclosure, limited regulatory oversight, hidden layers of leverage, and the growing interconnectedness with traditional banks. Overall, private credit has become a key segment of corporate lending, but its scale and structure suggest that competent authorities should monitor it carefully to ensure that vulnerabilities do not amplify stress in adverse economic conditions.