What types of risk does the Private Credit Market pose to banks?
The Private Credit Market has emerged over the last year as a big potential risk to the U.S. banking system. What are the main risks from this newer segment of the lending market? This episode examines four main risks. 1) Banks could experience direct losses from loans secured by private credit funds, i.e. NDFI lending. 2) Banks could lose their largest loan segment. Lending to NDFIs has become big banks #1 lending category over the last few years. 3) Banks will no longer be able to pass bad deals onto the Private Credit Market, SRTs anyone! 4) A contagion of delinquency leads to a drop in…
The skinny
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