The surge in the private credit market has sparked fears of lost bank revenue and the sector’s lack of regulation and transparency, issues previously raised by executives at Pimco. The shift towards private credit is a direct result of banks pulling back from financing buyout firms, which are now increasingly dependent on alternative funding sources.
Kelleher’s remarks mirror the wider industry anxiety about the burgeoning private credit sector, which includes direct lending to businesses, as well as financing for real estate and infrastructure projects. The rapid growth of this sector and the diminishing role of banks in underwriting loans pose significant questions about potential implications for financial stability.
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