US Banks Finance Their Own Competition to Tune of $1 Trillion

One of American banks’ fastest-growing businesses is lending to the very companies trying to grab their market share.

Traditional bank lending to non-bank financial institutions like private equity firms, hedge funds and private credit shops more than doubled in the past five years, according to data analyzed by Bloomberg. That 16% annualized rate far surpassed their lending to categories including agriculture, credit cards, commercial and industrial companies as well as foreign governments, the data show.

The phenomenon underscores the seismic shift taking hold in US finance, where less-regulated lenders have stepped into a void opened up after the financial crisis ...