Private credit won’t spark the next financial crisis
A lower leverage ratio and limited links to banks mean that the sector is unlikely to pose a systemic threat
Related reading
We must be mindful of the risks of private credit
The sector remains untested in a severe or prolonged economic downturn
Private credit isn’t the problem — concentration is
Diversification is the foundation of good investing
Private credit’s moment for a healthy reset
Recent ructions highlight the case for better scrutiny of the asset class
If private credit breaks, insurers will fall under the microscope
Rising holdings of the asset class could lead to problems when the next downturn comes
Private credit firms pile into consumer debt as risk-taking mounts
Growth raises concerns about underwriting and risk management at fast-expanding groups
Non-bank lenders may be fair-weather friends
Research shows they don’t just retreat in a crisis — they run for the exit