It is hard to understand why the alarm bells have been ringing quite so loudly on the possibility that the next big systemic risk will spring from private credit.
Yes, the asset class has grown rapidly: from roughly $500 billion of assets under management in 2014 to around $1.7 trillion today, with Preqin projecting $2.3 trillion by 2027. And higher rates are a threat to borrowers of floating liabilities, which is the form for all manner of private and direct lending by non-banks.
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