The Financial Services Regulation Committee has launched an inquiry into the growth of private markets in the UK, following regulatory capital and liquidity reforms introduced after the global financial crisis in 2008.
In particular, the inquiry will be looking at whether these reforms have reduced banks’ ability or willingness to lend, shifting risk away from the banking sector and towards private markets.
The Committee will review:
- Whether bank lending to the real economy in the UK has reduced as a proportion of the total volume of finance provided annually since 2008, and whether this change can be attributed to the reforms to the UK’s regulation of bank capital and liquidity requirements;
- What interconnections exist between the UK’s banking sector and private markets and how these have changed since 2008;
- What the implications of the growth in private markets, and their interconnections with the wider financial services sector, are for lending to the real economy and for the UK’s financial stability;
- Whether the BoE has sufficient visibility regarding non-bank finance, and what changes, if any, should be made to address this;
- Whether there are systemic risks that the BoE should be aware of regarding non-bank financial intermediation, and, if so, how these risks can be mitigated;
- How demand for finance from businesses has changed since 2008 and how it may develop in future;
- To what extent private markets have a competitive advantage over the banking sector to provide finance to businesses, and, if so, to what extent these may be regulatory in nature;
- What, if any, reforms to bank capital regulation could be implemented to increase the risk appetite of the banking sector to provide lending to the real economy; and
- What the UK could learn from other jurisdictions, in particular the US and the EU.
The inquiry closes for comments on 18 September 2025.