FT: As banks’ exposure to AI data center loans nears limits, they turn to credit insurance to free up capacity

According to the Financial Times, as AI data center financing scales up, some banks are approaching their internal credit exposure limits for a single borrower or industry and are beginning to use credit insurance to transfer part of the risk.

The report said that by purchasing credit insurance, banks transfer about 20% to 50% of the risk in loans to insurers, thereby freeing up capital space to continue lending. Barclays has already taken such an approach, HSBC is studying it, and JPMorgan Chase has assessed it but has not adopted it so far.

Some banks are willing to use 50% to 70% of the expected loan returns from the insured portion to pay premiums. The move is intended to address the massive funding demand for AI infrastructure.

The risk is shifted from banks’ balance sheets to insurers, but it does not disappear.

Original source:

1. Title: Banks turn to credit insurance as they hit limits on lending to AI boom Publisher: Financial Times Publication date: 2026-11-11 (approx.) URL: https://ft.trib.al/28rO0uv Source type: news report Verification status: This reading drew on the relevant report and market paraphrases; the core mechanism and banks’ actions are consistent with public information Supporting content: Supports the fact that banks are using credit insurance to transfer AI loan risk because of exposure limits