US Lawmakers, Federal Reserve Scrutinize Banks’ Private Credit Risks

Private credit refers to corporate lending by nonbank financial institutions such as funds and business development companies, or BDCs. The US market is worth about $1.4 trillion and accounts for roughly 10% of corporate borrowing. Banks’ share of corporate lending fell from 48% to 29% between 2015 and 2025 as capital shifted to less regulated, less transparent institutions, potentially allowing risks to flow back into the financial system through bank financing.

Federal Reserve Vice Chair for Supervision Michelle Bowman told a House Financial Services Committee hearing on June 4, 2026, that the Fed had begun collecting data in May, requiring large banks to report the total assets, net income and leverage of the nonbank financial institutions they lend to. She said bank lending to NBFIs had risen rapidly in recent years, but the ultimate destination of the funds remained unclear, prompting lawmakers to press regulators for details of private credit exposure.