U.S. securities regulators are “closely monitoring” problems they see as growing risk in the private credit market, a senior Trump administration official said Tuesday.

In an address at the Washington Economic Club, Securities and Exchange Commission Chairman Paul Atkins described “opacity” as a market concern that grew in the wake of tighter regulation of traditional banks after the 2008 financial crisis.

“The SEC is closely monitoring the credit gap being filled by private credit and the emerging pressures it has experienced recently, including elevated redemption requests and rising default rate projections,” Atkins said.

Concerns about the sector have persisted for months after last year’s bankruptcy highlighted problems with multiple debt holders pledging collateral. Investment giants like Apollo Global and Blackstone saw huge redemption requests in the first quarter.

Atkins urged caution before investing in private lending, describing the growth as “a natural consequence of heavy-handed regulation that forced banks out of the business of lending to small and growing enterprises,” he said.

“Let me be clear that while opacity may be an issue in this space, valuation transparency and credit quality are key, that high fees and low liquidity should be considered in terms of investment worthiness,” Atkins said.

Executives at major banks such as JPMorgan Chase and Goldman Sachs have described difficulties in the private credit market as a clock tick but not a systemic risk.

Federal Reserve Chairman Jerome Powell said late last month that the central bank was watching the space “super carefully” but did not see evidence of systemic risk, calling private credit a “relatively small part of a very large asset pool.”