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The hosts explore the explosive growth of private credit — now a $1.7 trillion market — and why banks are losing lending business to private credit funds. The key risk: these loans don't trade on exchanges, so no one really knows what they're worth until they default.
This summary was generated from show notes and public descriptions, not from a full transcript review. Details may contain inaccuracies.
Canon
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Alloway argues that after each financial crisis, regulations reduce risk in the old system, but market participants adapt to the new rules and recreate equivalent risk in a less-regulated space — a financial hedonic treadmill.
Highlights
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Private credit is the shadow banking system's newest iteration — same risks, different label
Weisenthal argues that private credit (where funds lend directly to companies instead of banks) is just the latest version of shadow banking: lending happens outside regulated institutions, risk is opaque, and liquidity is an illusion until it's tested.Was this useful?