Could the Growth of Private Credit Pose a Risk to Financial System Stability?

Abstract

The private credit market has grown rapidly in recent years, approaching the lending volume of some traditional sources of business credit, including commercial and industrial loans from banks, broadly syndicated loans, and high-yield bonds. This brief looks at the role US banks have played in that growth and the implications for stability in the US financial system.

Keywords: private credit, banking linkages, liquidity provision

JEL Classification: G20, G23, G32