Private credit and risks in the shadows
Lending money has been a profitable business for hundreds of years. Lending is often surprisingly uneventful, but when things go wrong, they can go wrong spectacularly. The industry is subject to credit cycles. This is because of the economic cycle, shifts in investor risk appetite, and changes to loan underwriting standards.
The term ‘shadow banking’ is a catch-all term for lending that takes place outside of the regulated banking system. Securitisation grew in the 1980s and 1990s, culminating in the Collateralised Debt Obligations that helped cause the Global Financial Crisis. This was once esoteric finance, but Margot Robbie changed that in the 2015 film ‘The Big Short’ when she explained how it all worked. For a more complete summary of the story, please see the below link:
Published on: Mar 29, 2026 03:06 PM