Private-credit fears are based on four myths
The growth of private credit in all forms has actually made our financial system more resilient and less concentrated
IN CHARLES MacKay’s 1841 book Extraordinary Popular Delusions and the Madness of Crowds, he highlights how mass human behaviour can lead to irrationality: “They go mad in herds while they only recover their senses slowly, one by one.”
That line feels apt today amid a wave of intense conjecture in the media and elsewhere about the risks embedded in so-called private credit.
Private credit is privately negotiated loans and debt sold directly to long-term investors – an alternative to bank lending and publicly issued debt securities.
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