The U.S. Department of the Treasury will discuss issues in the private credit market with insurance regulators.

The U.S. Department of the Treasury said Wednesday it will meet with domestic and international insurance regulators to discuss recent developments in the private credit market, as concerns over the health of the $2 trillion non-bank lending industry are affecting the broader credit markets.

In a statement, the Treasury Department said these meetings are scheduled to begin this month and continue into early May, aiming to inform participants about recent market dynamics, emerging risks, risk management practices, and industry outlooks.

The Treasury added, “The initial round of meetings will help strengthen regular communication with state insurance regulators, who are the primary regulators of the insurance industry, and lay the foundation for ongoing close cooperation.”

Earlier reports indicated that U.S. Treasury officials are eager to hear regulators’ feedback on rising leverage at the fund level, the stability of private credit ratings, the use of offshore reinsurance, and liquidity in private credit market investments.

Concerns over liquidity, transparency, and lending discipline have shaken investor confidence in the private credit sector — which refers to loans provided by non-bank institutions such as private equity funds and asset management firms to companies. Some private credit firms holding cases of bankruptcies involving auto parts supplier First Brands and car dealer Tricolor have also contributed to declining investor confidence.

In recent weeks, this unease has permeated the market, with some large U.S. banks tightening lending and private equity funds restricting redemptions amid a surge in redemption requests over the past few months.

These concerns have also sparked debate over whether issues in the private credit market are isolated incidents or could evolve into systemic problems.

Bank of England Governor Andrew Bailey warned on Wednesday that private credit failures should not be viewed as isolated events, and that the sector’s opacity could amplify shocks, with impacts similar to those of the 2008 financial crisis.

In the U.S., St. Louis Fed President Alberto M. Musalem said the financial environment remains “generally accommodative,” and that pressures in the private credit market are mainly confined to that sector, not indicative of a broader crisis.