Retailization of Private Credit: Systemic Risk Implications of Semi-Liquid Vehicles and 401(k) Integration Post-Executive Order 2025
Extends the K-A-T framework to retail distribution channels. Three formal propositions: (i) retail funding constraints amplify procyclically through behavioral contagion and information asymmetry (K_retail); (ii) redemption cascades in semi-liquid vehicles create amplification mechanisms structurally analogous to bank runs but without deposit insurance (A_retail); (iii) absent lender-of-last-resort implies near-zero policy backstop (T_retail ~ 0). Empirical analysis on novel SEC EDGAR XBRL panel of 10 publicly-traded BDCs (138 quarterly observations, 2020-2025), plus event-snapshot data for non-traded vehicles. The March 2026 gate wave (BCRED 7.9%, HLEND 9.3%, Cliffwater 14%) yields Forbes-Rigobon adjusted correlation 0.43 (rejecting no-contagion at 1%), DCC-GARCH persistence beta = 0.967 (half-life 36 trading days), and Diebold-Yilmaz connectedness 68.0% (ARCC dominant net transmitter +12.6pp). Placebo: semi-liquid BDC connectedness 75.6% exceeds daily-liquid ETF 64.5%. Proposes Retail Private Credit Gateway (RPCG) regulatory framework: mandatory liquidity buffers (15-20% NAV), standardized valuation disclosure, ERISA-compliant suitability, FSOC designation authority for systemically important semi-liquid vehicles.
Authors
- Luka Stanisljevic
Publication Details
- Journal
- Zenodo (CERN European Organization for Nuclear Research)
- Published
- 2026-05-09
- DOI
- https://doi.org/10.5281/zenodo.20095777
- Primary Topic
- Financial Reporting and XBRL
- Type
- article
- Field-Weighted Citation Impact
- 0.00