US Banks Back $300 Billion of Private Credit Debt, Moody’s Says

Anxiety about the quality of underwriting has put private credit in the hot seat on Wall Street. Yet some of the same banks raising the alarm are the ones fueling growth in the asset class.

US banks have lent about $300 billion to private credit providers as of late June, while lending to all non-depository financial institutions, a group that includes hedge funds, private equity firms and pension funds, has surged to $1.2 trillion, according to a report from Moody’s Ratings on Tuesday. The report relied on data from the Federal Reserve’s Board of Governors.

Among banks lending to private ...