The Federal Reserve is asking major US banks to detail their exposure to private credit funds after a surge in investor redemptions and a rise in troubled loans across the $1.8 trillion industry. Fed examiners are incorporating the questions into routine bank oversight, specifically targeting the debt that private credit funds have taken on from banks. In good times, that leverage juices returns. In bad times, it puts bank collateral directly at risk. Treasury is running a parallel effort, questioning the insurance industry about its own private credit exposure and assembling a dedicated team to assess the risk. The timing matters. Retail-facing credit funds have come under pressure in recent months as investors rushed to pull cash. International regulators are sounding alarms too. FSB Chair Andrew Bailey warned this week that the Iran conflict is compounding stress in private credit markets. Banks and private credit are deeply intertwined despite efforts to appear otherwise. Credit funds depend on banks for custody, credit lines, and leverage. Blackstone, Blue Owl, and KKR credit funds are running debt-to-equity ratios between 0.7x and 0.8x. Jamie Dimon acknowledged the industry suffers from a lack of transparency and poor valuation standards, though he stopped short of calling it a systemic risk. Meanwhile, the Trump administration is actively pushing to loosen lending rules for banks, partly to help them lend more to these same private credit firms. Regulators are trying to map the risk at the same time policymakers are expanding it.