Banks Get Bullish on Private Credit

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Contrarians, take note: Private credit is now an officially certified problem that’s being closely monitored by the US Securities and Exchange Commission. This apparently is a buy signal for institutions that are rushing in where retail investors fear to tread, because they’re finally getting paid to take the extra risk, now that prices have dropped and yields have improved.

By Bloomberg’s reckoning, the biggest US banks have $185 billion of exposure. They’re likely to do more to take advantage of nonbank lenders grappling with redemptions and close-to-forced sales. Tens of billions of fresh cash is being committed by JPMorgan Chase & Co., the same bank whose boss has been needling private marketeers about their loose lending standards. Even dinged and dented assets like Blue Owl looked attractive, thanks to some good advice from Morgan Stanley on how to pitch itself. That’s if you’re buying private credit today; back in November, Wells Fargo stepped into the Market Financial Solutions mess and now has about $193 million tied up in the collapse.

Europe’s regulators are showing some muscle. Months of lobbying and vows of fealty by UBS Group managed to trim a few billion dollars off the Swiss government’s demand for more capital, but the bank still has to scrounge up a fresh $20 billion. That’s prolonging a showdown between Bern and UBS that’s been going on for years.

Sometimes it’s not just business, it’s really personal, too: President Donald Trump’s lawyer says Jamie Dimon can’t “escape liability” for JPMorgan Chase allegedly blacklisting the president after the Jan. 6 Capitol riot. This could be quite a show; The Monitor is going long on popcorn. — Rick Green