Explanation:
Post-GFC, persistently low interest rates made traditional fixed-income instruments less attractive, prompting investors to seek higher-yielding alternatives, such as private credit.
A is incorrect: Increased capital requirements for banks led to reduced willingness to lend to middle-market firms, creating opportunities for private credit providers.
B is incorrect: Investor demand for higher-yielding alternative investments increased, not decreased, during this period.
D is incorrect: Private credit remains relatively opaque and lacks the standardization seen in public markets.
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Q.6396 The rapid growth of private credit since the Global Financial Crisis (GFC) can be attributed to which of the following factors?
A
Increased regulatory capital requirements for banks
B
Lower investor demand for alternative investment strategies offering higher yields.
C
Low interest rates.
D
Increased transparency and standardization of private credit transactions.
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