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After months of scrutiny, the UK’s House of Lords has concluded it still does not know how much risk private markets pose to the UK economy. This, despite session after session of interrogation of governors past and present of the Bank of England, larger lenders like M&G, the British Business Bank, academics and industry associations, banks and law firms.

“There is insufficient data to conclude whether private credit is systemic, meaning there are considerable ‘unknown unknowns’,” concludes the Unknown Unknowns report, published 9 January by the Financial Services Regulation Committee.

Data was the issue. “The Committee was not able to obtain extensive or detailed data on the growth of private markets in the UK, the growth of lending provided by private credit, or the scale of the interconnections between banks and private markets.”

What the report does identify, however, is the increasing exposure of insurance funds to private credit. And, while insurers are being tested by the Bank of England as part of their system-wide exploratory scenario (stress testing) for private credit, this kind of system-wide exploratory testing does not appear to be happening in interlinked markets like the US.