It's called 'private credit' — and it could lead to big trouble on Wall Street

Private credit — a high-risk lending business that operates outside traditional banking channels — has experienced rapid growth but is now showing signs of strain visible across Wall Street. The sector's expanding problems indicate potential vulnerabilities in financial markets as lenders have extended credit with minimal oversight or regulation. Growing concerns about asset quality and borrower defaults could expose major financial institutions and investors who have backed these loans to significant losses. The visibility of these issues suggests regulators and market participants are increasingly focused on the sector's systemic risks.