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.

US banks, typically in fierce competition with private credit firms, are enabling their rivals’ boom. Bank exposure to both business development companies (BDCs) — which pool direct loans — and other types of private debt vehicles reached about $95 billion by the end of 2024, according to a Federal Reserve report published last week.

Domestic banks were lenders on 50% of loans to BDCs as of ...