How Banks and Private Credit Became the Best of Frenemies
Episode publishedPodcast: Odd LotsOdd Lots
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Instagram teen accounts. Automatic protections for who can contact teens and the content they can see. Learn more at instagram.com/teenaccounts. Bloomberg Audio Studios. Podcasts, radio, news. Hello, and welcome to another episode of the Odd Lots podcast. I'm Tracy Alloway.
And I'm Joe Weisenthal.
Joe, I feel like I start every private credit episode with the same point. But, I mean, private credit, it's everywhere right now. I think I counted, like, dozens and dozens of stories on private credit that came out just on the Bloomberg in the past week.
There's 2 funny things that are going on, which is 1 private credit. So these non bank entities providing loans, etcetera, wanting to get into credit, and there's more and more about that every day. And then there's banks wanting to get more and more into private credit, which is this own thing of, okay, you're still the bank, but you're doing it in some sort of balance sheet structure that resembles private credit. And what's up with that?
What's up with that indeed? This is the what's up with that episode. I'm so glad you asked that question, but we're gonna be talking about the relationship between banks and private credit. Because the other thing that's been happening is every time we talk to a bank or a private credit entity on this show and we ask about the relationship between regulated banks and non banks, you get this really diplomatic kind of awkward answer. Like, well, we view our bank partners as opportunities, and no one will really explain how they actually feel about each other. Totally.
You know, the one other thing before we get into it that I think about a lot is I look at the rise of private credit, and there is a big part of me that says, this is what regulatory success looks like. Mhmm. This is what post Dodd Frank success looks like, that there is more of this risk taking activity.
Right. This was the intent.
Yeah. Happening outside of the deposit taking banking institution. On the other hand, if a lot of the leverage for private credit and a lot of these relationships is being plied by banks and so forth, then it makes me wonder, did we actually extricate the risk? Or in the end Do
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