JULIUS Baer’s decision to exit the private debt business is unlikely to prompt similar moves across the financial sector. But, market watchers said that greater caution is inevitable as the impact of Signa’s collapse continues to unfold.
Private debt products may face greater scrutiny, and lending rates may rise. Focus may also shift to new markets.
When European luxury property group Signa filed for administration late last year, Julius Baer was among the banks flagged for exposure. There are reportedly over 100 others, not including various insurers and asset managers.
Competition has been stiff among lenders, as non-bank players crowded in while corporate demand flagged. Those dynamics allowed…