US banks’ lending to private credit soars, Moody’s flags potential risks

US banks’ loans to private credit providers have surged to nearly $300 billion, Moody’s said in a report released this week, and the ratings agency warned that smaller lenders could face heightened risks if underwriting standards weaken.

Loans to non-depository financial institutions (NDFIs) are now 10.4 per cent of total bank loans, nearly three times the 3.6 per cent exposure a decade ago, the report said. The aggressive growth outpaced