On December 5, the ACC published a summary note on the Bank of England’s upcoming Private Markets System-Wide Exploratory Scenario (SWES). Running from 2025 to 2027, the exercise will analyse how stress could propagate across private credit, leveraged lending and related private markets. The exercise is a system-wide assessment focused on behaviours, liquidity management, leverage and interconnections with banks and insurers. Participation is voluntary, and a significant number of private credit managers have opted in. The ACC’s note outlines what the Bank aims to understand, the data firms will be asked to provide, and how the findings may shape future regulatory thinking.

Key Takeaways

• Purpose: Assess how private markets collectively respond to severe but plausible stress, including potential feedback loops across the financial system.
• Scope: Private credit, leveraged loans and PE-backed corporates; excluding venture capital, growth equity and UK commercial real estate.
• Not a firm-level test: The SWES will not evaluate individual firms’ resilience or capital adequacy.
• Data expectations: Firms will model the impact of the stress scenario, outline potential management actions and provide supporting portfolio data.
• Why it matters: Results may inform future supervisory priorities, close data gaps and improve understanding of risk transmission across private markets.

The Bank of England will finalise the scenario design and data requirements through 2025, launch the stress scenario in early 2026 and publish interim findings later that year, with a final report expected in 2027. The ACC will continue engaging with members on the process and any implications as the work progresses.

For further information please contact Nicholas Smith ([email protected])