Canadian life insurers, pension funds, investment funds, and banks have accumulated approximately C$500 billion in private credit exposure, with the majority invested in US markets. Life insurers hold the largest position at over C$200 billion, representing about 22% of their total invested assets, while pension funds total approximately C$215 billion, accounting for roughly 9% of their assets. The Bank of Canada’s analysis, published in August 2026, shows that Canadian lenders favor direct lending over third-party managed private credit funds, which may limit some risks. However, the central bank warns about potential transmission of financial stress from US markets into the Canadian system due to limited transparency on how private credit will perform in a major economic downturn.
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