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2025-10-23 09:15:59
Moody's: Surge in US Bank Lending to Private Lenders Could Pose Risks] Moody's stated in a report that US bank lending to private lenders has surged to nearly $300 billion. The agency warned that smaller lenders could face greater risks if underwriting standards weaken. The report states that lending to non-depository financial institutions (NDFIs) now accounts for 10.4% of total bank loans, nearly triple the 3.6% share a decade ago. The report adds that this rapid growth has outpaced all other lending activities since 2016. In recent weeks, some regional banks, including Zions Bancorp, have experienced nonperforming loans and suspected fraud, raising investor concerns about broader strains in the financial sector. Moody's stated that in addition to exposure to private lenders, $285 billion in loans had been extended to private equity funds as of the end of June, and these borrowers had an additional $340 billion in unused loan facilities. Analysts believe the recent situation is a unique event, not a systemic issue with credit quality. Banking executives have also downplayed the risks of private lending.
