The shadow of the subprime mortgage crisis reappears. Why should the market pay attention to the risks in the private credit market?【New York Talk32】

New York Talk · Guo Shengbei on Wall Street Frontline Insights
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Introduction of Our Guest Expert:

Blue Owl has started restricting redemptions, and its stock price has fallen back to two years ago.

This is not an isolated case; the entire private credit industry is in decline. Meanwhile, regional bank stocks are also falling.

Is there a connection between the two? Over the past two years, banks have lent trillions to non-bank financial institutions, much of which flowed into private credit. Now, if borrowers run into trouble, can banks still recover their loans?

If this chain breaks, the credit expansion mechanism will stall — the money supply will contract, and the stock market will come under pressure.

What’s more concerning is that the Federal Reserve is in a policy vacuum, with the new chair only taking office in May. Risks are accumulating; who will take the helm?

In this episode, Guo Shengbei, founder of GSB Award Fund and former Managing Director at Deutsche Bank, will analyze the deadly link between private credit and bank stocks.