Private credit market grows to $1.4 trillion
Federal Reserve Vice Chair for Supervision warned that the central bank’s capital rules have driven corporate lending from regulated banks to the private credit market.
The private credit market has grown to $1.4 trillion, comparable to the high-yield bond and leveraged loan markets.
The shift is a result of post-2008 bank capital rules, which made it more costly for banks to lend directly to corporate borrowers.