Bank chief warns of 2008 crash echoes in US credit markets

The governor of the Bank of England, Andrew Bailey, has warned that recent turmoil in US private credit markets has worrying echoes of the subprime mortgage crisis that kicked off the global financial crash of 2008.

- Heather Stewart Graeme Wearden

Appearing before a House of Lords committee, the governor said it was important to have the “drains up” and analyse the collapse of two leveraged US firms, First Brands and Tricolor, in case they were not isolated events but “the canary in the coalmine”.

He said: “Are they telling us something more fundamental about the private finance, private asset, private credit, private equity sector, or are they telling us that in any of these worlds there will be idiosyncratic cases that go wrong?

“I think that is still a very open question; it’s an open question in the US.”