Michael Moore’s Outlook on regulatory risks and rewards in 2026

Why don’t we see bad things coming? So asked the writer of a recent piece of ‘thought leadership’ I happened upon. Against my better judgement I read on. Only to confirm my instinct, that an article entitled ‘how to see bad things coming’ was what I was really looking for, but I shouldn’t hold my breath.

The reasons we can’t foretell the future are unchanged since the dawning of time. Even the most evangelical AI enthusiast might accept that. Or given the hype in certain quarters, maybe not.

A couple of years ago at this time of year, I made the case that the annual round of predictions might be of limited value, but was more fun than contemplating new year resolutions to go to the gym more often, or give up bad habits for a month or so. I guess that still holds.

But I would be the first to admit that while my prediction that 2024 would be ‘lively’ was not wrong, nor was it particularly earth-shattering, given the elections due that year in the UK and across in the USA.

Not being able to see the future can be a real pain, of course, and potentially rather costly. As a result, we never give up hope that we might crack the code at some point.

At a serious level, regulators are paid to minimise the risks of ‘bad things coming’. It is no surprise then that the ever-growing complexity of financial markets, and the role of private capital within them, is attracting higher and higher levels of scrutiny from them. This is one part of a broader range of work which seeks to answer a variant of the opening question – how do we avoid a repeat of the bad things that came in the Great Financial Crisis of the late noughties?

Alongside their broader work on systemic risk, the Bank of England are mapping out scenarios against which they can specifically test how private markets would react in a moment of acute stress. They want to know what that could mean for the stability of the financial system on the one hand and the performance of the real economy on the other.

Why now? Well, it is inarguable that private equity, private credit and venture capital are larger elements of the financial system and have a greater role in the real economy than ever before. And it is also the case that should there be a significant downturn, the ability of governments to respond through fiscal or monetary interventions looks much more constrained than it was in 2008-09 and the years after.

So, given what’s at stake, it doesn’t seem unreasonable that regulators want as good a guide to ‘how to see bad things coming’ as they can manage. Accordingly, the industry has responded constructively and is fully engaged.

Aside from passing the examination that is underway, and building confidence as a result, there is another prize in prospect from the ‘system wide exploratory scenario’ project (stress tests to you and me) - an enhanced understanding for regulators, and other policymakers, of the positive role of private capital in the economy. In truth, senior officials at the Bank already acknowledge this, but it will be good to share that judgement more widely.

Perhaps more immediately, we are also aiming for greater recognition of the resilience of the industry’s investment and financing models. This ought to arise as a by product of regulators having a better insight into the interconnectivity of the equity and debt investors of our world and those of the wider financial system.

The process to get us from our starting point to the better informed place regulators wish to inhabit will require a lot of effort. There will inevitably be a degree of creative tension in keeping the scope manageable and ensuring proportionality remains at the heart of the exercise.

We will continue to work with all the parties in the industry and at the regulators to keep the balance right and to achieve what should be a set of worthwhile prizes – as close to a definitive ‘how to see bad things coming’ guide as we can manage through our collective expertise, and an enhanced, shared vision of the benefits which the growing private capital industry delivers for everyone.

That outcome is not yet a prediction, since there is a lot of ground to cover. But I would style it as a fairly confident aspiration – which should be more than enough for now, as we embark on a new year which is likely to be as lively as any in recent years. All the best for 2026!

Michael Moore
Chief Executive, BVCA

This article was originally published on 9 January 2026 on the Private Equity News website here.