Fed’s Barr Warns Private Credit Stress Could Trigger Wider Market Panic

Fed’s Barr warns private credit stress could trigger wider market panic

Fed’s Michael Barr warns private credit risks could trigger “psychological contagion,” credit pullbacks, and renewed scrutiny of bank deregulation—read...

Stress in private credit could spark ‘psychological contagion,’ Fed’s Barr tells Bloomberg News - Regional Media News

May 3 (Reuters) - U.S. Federal Reserve Governor Michael Barr said stress in private credit could spark "psychological contagion" leading to a broader credit crunch, Bloomberg News reported on Sunday. While direct links between banks and private credit do not yet appear "super worrisome," there were other areas of concern such as the insurance sector's overlaps with private lenders, Barr said in an interview with Bloomberg News. "People might loo…

Fed's Barr Says Private Credit Stress Could Trigger Larger Credit Issues

Federal Reserve Governor Michael Barr is the latest official warning of private credit-related concerns. Stress in that market could lead to “psychological contagion” and thus set off a wider credit crunch, Barr said in an interview with Bloomberg News published Sunday (May 3). He told Bloomberg that although direct connections between banks and private credit do not yet seem “super worrisome,” there were other areas of concern, includ…