UBS chair warns of 'systemic risk' from private credit ratings. Apollo CEO fires back: 'He's just wrong.'
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The tension between big banks and private credit giants is flaring up again. The latest tussle started as the chair of UBS warned about risks in the US insurance industry due to private financing. Colm Kelleher warned that the "lack of effective regulation" in the insurance industry is causing a "looming systemic risk" as there's a "massive growth in small rating agencies ticking the box for compliance," on Tuesday at a conference hosted by the Hong Kong Monetary Authority.
AI Summary
Main Idea: UBS chair Colm Kelleher warned that private credit and loose insurance rules could create systemic risk, and Apollo CEO Marc Rowan pushed back, saying Kelleher was wrong.
Key Points:
- Kelleher said weak oversight in insurance is fueling a rise in rating agency arbitrage, which he compared to the buildup that helped drive the 2007 subprime crisis.
- He argued that insurers are taking on more private credit risk while relying on smaller rating firms to meet compliance needs.
- Rowan said the real issue is not the ratings agencies, but the quality of lending and underwriting across the credit market.
- Rowan also said Apollo’s Athene holds mostly investment-grade assets and warned that some concerns about systemic risk are really about late-cycle behavior and bad actors.
Impact on the People
Negative Impact
If private credit risks are overstated or hidden, households, workers, and taxpayers could face losses, tighter lending, or stress in the insurance system.
Positive Impact
Apollo says large firms like Athene keep most assets investment grade, which could support steadier returns for savers and retirees if underwriting stays strong.
How did each entity affect people?
Rate how each entity in this article affected the American people.
- Primary:Apollocompany
- Primary:CEO Marc Rowanperson
- Primary:Chair Colm Kelleherperson
Candidate Entities10 candidates · 5 weighted vote min · 70% decision
- ApollocompanyPrimaryEvaluated
Private capital giant at the center of the article through its Athene business and CEO’s response.
Include 0 (0%)Ignore 0 (0%)5 to threshold - CEO Marc RowanpersonPrimaryEvaluated
Apollo CEO who directly rebuts Kelleher and gives the main counterargument in the story.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Chair Colm KelleherpersonPrimaryEvaluated
UBS chair whose warning about systemic risk and rating-agency arbitrage is a central focus of the article.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Ares ManagementcompanyMajorAI selected
Major private credit firm whose CEO’s comments are included as part of the broader industry response.
Include 0 (0%)Ignore 0 (0%)5 to threshold - AthenecompanyMajorAI selected
Apollo-affiliated insurance platform discussed as a key example in the private credit and insurance debate.
Include 0 (0%)Ignore 0 (0%)5 to threshold - CEO Michael AroughetipersonMajorAI selected
Ares CEO whose remarks on credit risk are quoted as a significant supporting viewpoint.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Fitch RatingscompanyMinorCandidate
One of the large established ratings houses referenced in Rowan’s comments.
Include 0 (0%)Ignore 0 (0%)5 to threshold - KrollcompanyMinorCandidate
Smaller ratings agency cited by Marc Rowan as part of the ratings discussion.
Include 0 (0%)Ignore 0 (0%)5 to threshold
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