What Next | Daily News and Analysis Why Everyone Is Freaking Out About Private Credit
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Apr 3, 2026 
Tracy Alloway, Bloomberg Odd Lots co‑host and markets reporter, breaks down private credit and its rapid growth since 2008. She explains why lenders moved outside banks. Short takes cover tech and AI firms borrowing, illiquid loan valuations, redemption limits, and growing ties between banks, insurers, and private credit.
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Joining Finance Reporting At The Heart Of 2008
- Tracy Alloway recounts starting at the Financial Times in September 2008 when few people understood the unfolding mortgage crisis.
- That timing put her on an even footing covering finance despite a background in airlines, illustrating how crises reshape beats.
Private Credit Is A Fast Growing Shadow Banking Market
- Private credit (formerly shadow banking) has grown rapidly to roughly $1.3–$3 trillion and now rivals longstanding markets like junk bonds.
- That growth stemmed from post-2008 bank regulation pushing riskier lending into nonbank vehicles like BDCs without deposit protections.
Opaque Valuations Make Private Credit Fragile
- Private credit deals are private, often unrated, and trade infrequently so valuations rely on quarterly third-party marks rather than continuous price discovery.
- That opaque marking process can lag market moves and hide whether valuations would hold if many investors tried to exit simultaneously.