Working Paper 1388 studies the US liquidity-coverage-ratio setting. Its estimated effects should be read within the research design, without turning them into a complete systemic-risk verdict.
What the primary record establishes
Published on 20 October 2026, Working Paper 1388 studies how bank liquidity regulation relates to private-credit growth. The authors report larger growth in US counties with greater prior exposure to banks subject to the liquidity coverage ratio, including banks with larger initial liquidity shortfalls. BIS Working Paper 1388 — Bank liquidity regulation and private credit, 20 October 2026 ↗
The paper says total systemic-risk effects are complex and beyond its scope. Its reported relationship is an empirical research result, not an announcement of a new LCR requirement or a determination that every private-credit investment is safer than bank lending. BIS Working Paper 1388 — Bank liquidity regulation and private credit, 20 October 2026 ↗
What the distinction changes
For brokerage and market-infrastructure teams, the lesson concerns counterparties and funding chains. A change in where lending is originated does not remove the need to identify who supplies liquidity, who bears credit exposure and how an institution meets cash demands.
It also matters which conclusion the data design supports. An estimated response in a US regulatory setting should not be mechanically applied to every country, asset class or future period. A research coefficient is not a quoted return or a loss forecast for a customer portfolio.
What to check before drawing a conclusion
Keep the population, policy setting and estimated outcome attached to any summary. When assessing an actual counterparty, review its own funding, commitments and exposures. A label such as bank or non-bank does not supply the full risk assessment.
WFN infers that shifts across financing channels deserve operational mapping rather than a simple safer-versus-riskier slogan. The publication records the authors’ analysis; it does not replace institution-specific evidence or settle the broader systemic-risk question the paper expressly leaves open.