The $1tn Shadow Bank Lending Boom

Shadow banks such as hedge funds and other financial services providers are increasingly being targeted by European financial supervision.

Bank Lending to Private Credit Funds Swells 145% in Five Years

Wall Street banks have emerged as the staunchest financial supporters of the $1.7 trillion private credit industry, with the volume of their loans to private debt funds soaring 145% over the past five years.

The $1tn shadow bank lending boom

‘This is a sensitive trade-off that has not always been well managed in the banking industry’

US banks are providing fewer direct loans to companies, while their financing to shadow banks - such as private credit funds, insurers and asset managers - is rapidly increasing, the Financial Times reported.

The $1tn Shadow Bank Lending Boom - Data Intelligence

US banks are lending less and less to companies these days. But the business of lending to so-called shadow banks — such as private credit funds, insurers, asset managers and credit hedge funds — is booming. On the face of it, bank lending to “commercial and industrial” companies (C&I loans) has merely stagnated in recent years, at about $2.8tn at the end of March. However, as a percentage of bank assets and relative to the size of the US econom…