Why the corporate regulator is bracing for the risk of another global credit crunch | The Business

Private credit lending outside the banks is a growth industry, with high interest rates and potentially high risks.
The corporate regulator, ASIC has sounded the alarm after disastrous collapses in the US credit sector.
For example, Blue Owl shares have plummeted 36 per cent this year as investors fret about the lender's exposure to ailing software companies impacted by the AI boom.
US auto lender Tricolor Holdings, and UK mortgage lender Market Financial Solutions have already collapsed.
In Australia, there's currently $250 billion worth of private credit loans. Most lending is in property, and the regulator is warning a housing crash could spark a private credit financial shock
ASIC Commissioner Simone Constant says private credit is at a size and at a breadth that hasn't been seen before, and hasn't been tested in a downturn, "so there would be bumps" if there were to be a private credit collapse.
And it's Australia's $4.5 trillion superannuation sector that has the regulator worried.
With lending rates upwards of 15 per cent for these type of loans, ASIC is fearful a property crash could side swipe the local private lending sector.
It's told the ABC million of superannuation accounts could wear some of the losses.
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