Private Credit's Risks to Savings & Banking

In March 2026, Fitch Ratings reported that the default rate among U.S. corporate borrowers of private credit hit a record high of 9.2 percent. Financial and legal experts focused on the risks to investors who put their money in private credit funds, especially funds structured as nontraded business development companies (BDCs). Notably, nontraded BDCs and publicly traded BDCs can seek capital from retail investors, while other private credit funds are generally limited to raising capital from insurance funds, pension funds, endowments, and high-net-worth individuals. But the risks posed by those other private credit funds could still be transmitted to ordinary Americans and the financial system. Read Full Article »