(12 November 2025 – United Kingdom) Senior leaders from HSBC and Barclays have cautioned UK lawmakers that domestic banks are losing competitive ground to fast-expanding private credit firms and US rivals, citing disproportionately heavy capital requirements.
Speaking before the House of Lords financial services regulation committee, and reported in the Financial Times, executives argued that UK lenders face stricter rules than private credit groups, which continue to grow rapidly with far lighter oversight. This comes as US regulators move towards significant deregulation and the Bank of England reviews its own capital framework.
Since the 2008 crisis, private credit funds have surged, especially in the US, providing company loans that are often securitised and sold to institutional investors. Both regulators and bank leaders see echoes of pre-crisis risk migration.
HSBC’s head of corporate and institutional banking, Michael Roberts, noted private credit’s 15 percent annual growth rate and highlighted the competitive imbalance created by capital rules: “There is a considerable difference between lending into the private credit fund on that diversification and securitisation basis versus lending directly to the client itself,” he said.
Roberts explained that HSBC’s capital requirements were five times higher when lending to small and medium-sized companies than when it provides funding for private credit groups to finance loans to the same businesses.
Barclays’ Stephen Dainton urged regulators to fully appreciate the scale of the largest private credit players — including Blackstone, Apollo and BlackRock, which together exceed $400bn in market value.
“We should not underestimate that scale,” he said, stressing the need for more granular regulatory attention.
US regulatory changes could free up nearly $140bn of capital for Wall Street banks, equal to an estimated $2.6tn in additional lending capacity, increasing pressure on UK authorities to respond. The Bank of England is due to publish its review of capital requirements next month.
Dainton also warned that global divergence from the Basel framework could further erode competitiveness, urging UK regulators to ensure domestic lenders “are not disadvantaged.” Roberts added that private credit firms should be required to provide more transparency, saying: “You would have to approach it in a somewhat similar way to the way you approach banks in terms of the information you provide.”
The Bank of England declined to comment.