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Select committee: Financial Services Regulation Committee

3rd Report - Private markets: Unknown unknowns

Published 9 January 2026

Financial Services Regulation Committee Growth of private markets in the UK following reforms introduced after 2008 Report on parliament.uk ↗

At a glanceGovernment response published 6 March 2026 (deadline 9 March 2026)

The government's response

Response from HM Treasury to the Committee’s 3rd Report of Session 2024–26, ‘Private markets: Unknown unknowns’

Published 9 March 2026. The deadline was 9 March 2026.

Summary written by Accountability Index from the government's response. It is not the government's own words.

The Government "welcomes the report" and "fully agrees" on the need for vigilance about financial stability risks from private markets, while rejecting "any notion that the Treasury is passive" in the face of them.

  • On the Bank of England's System-Wide Exploratory Scenario, the Government welcomes it and "strongly supports" it. Should it indicate risks that "may warrant a policy action", the Treasury will work with the Bank on what may be "necessary and proportionate" action.
  • On regulators' powers, the Treasury keeps them "under ongoing review" and is "committed to ensuring regulators' powers" allow access to appropriate information. "Where necessary", it will act to strengthen protections while keeping regulation "proportionate and targeted".
  • On data, the Government agrees it is important to understand trends in corporate debt and lending, and "recognises the need to strengthen the coverage and granularity of relevant data".
  • On SME lending, it points to the PRA's "SME lending" adjustment in Basel 3.1 and a commitment to support industry to roll out 350 banking hubs "by the end of this Parliament". The FPC will give a further update on its bank capital review on 7 July.

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Response from the Bank of England to the Committee’s 3rd Report of Session 2024–26, ‘Private markets: Unknown unknowns’

Published 6 March 2026.

Summary written by Accountability Index from the government's response. It is not the government's own words.

The Bank of England and PRA welcome the Committee's report, agree with several of its conclusions on private markets monitoring and data, and describe a private markets system-wide exploratory scenario (PM SWES) with a final report due in early 2027.

  • On monitoring, the Bank and PRA "agree that the rapid expansion of global private markets presents both opportunities and risks for the UK" and say they "will continue to monitor" securitisation markets, including significant risk transfers and collateralised loan obligations, "carefully as they evolve".
  • On the PM SWES, the Bank "anticipate[s] having largely completed firm engagement and analysis for the exercise in 2026, with a final report to be published in early 2027", and expects to publish key findings over 2026, in line with milestones such as Round 1 results.
  • On data, the Governor "agree[s]" that appropriate data, proportionate to the risks, is essential, while saying the Bank is "always mindful" of balancing data gaps against the cost of regulation, including the Government's 25% administrative cost reduction target.
  • On SME lending, the PRA describes its Small Domestic Deposit Taker regime (capital regime from 1 January 2027), an enhanced IRB model review process effective for applications from 1 January 2026, and says it is "currently working with HM Treasury to explore" further ring-fencing reform.

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