LFRS: Who Bails Out Private Credit? Banks, Backdoors, and the Safety Net

The London Financial Regulation Seminar is an inter-collegiate and inter-disciplinary group of experts led by CCLS and our Institute of Banking and Finance under the leadership of Professor Rosa M. Lastra and Dr. Daniele D’Alvia. On Monday, the 9th of February, Prof. Patrick Corrigan discussed his last paper titled “Safekeeping Too-Big-To-Fail Banks from Private Credit”. Prof. Rosa M. Lastra chaired the event, and Robert Gammage was the discussant. Prof. Patrick Corrigan’s research analyses how laws and legal institutions shape capital markets and transactional structures, with a particular focus on issues related to initial public offerings and banking law. Corrigan has published work in the New York University Law Review, Washington University Law Review, Yale Journal on Regulation, and Journal of Empirical Legal Studies, among others. Professor Corrigan’s article “Do the securities laws work (and how)? Lessons from SPACs” originally published in the Washington University Law Review, was selected for republication into Corporate Practice Commentator and Securities Law Review 2025. Corrigan’s work has been cited in final orders by the Securities and Exchange Commission and featured in various media outlets. Mr. Robert Gammage was the policy analyst for the House of Lords (UK) Financial Services Regulation Committee. He is now a policy adviser for non-bank resolution in HM Treasury. This paper examines the growing involvement of banking organisations in private credit and private investment funds, and the prudential risks this trend poses for financial stability. Drawing on legal analysis and original empirical evidence, the paper shows how equity investments and joint ventures with non-bank financial intermediaries may allow banks to circumvent traditional prudential constraints, intensifying moral hazard, regulatory arbitrage, and the extension of the public safety net to private markets. The presentation will also discuss potential regulatory responses from a safety and soundness perspective, including enhanced disclosures, firewalls, and investment restrictions. Date: 9 February 2026, 17.00 to 18.00 PM GMT Venue: online webinar through Microsoft Teams hosted by Queen Mary University of London