Fed Official Saw No Systemic Risk in Private Credit

Federal Reserve Governor Lisa Cook noted that while the sector is growing, it does not currently threaten financial stability.

Updated on Oct. 1, 2026 in Economic Indicators

Isometric editorial illustration of structural steel beams, representing the solid foundation and monitoring of credit lending in the financial sector. — Federal Reserve Governor Lisa Cook stated that private credit does not currently pose a systemic threat, though the central bank continues to intensify its monitoring of the sector. AI Illustration. Upload story photo >

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Do you trust that the private credit market is currently stable for the broader financial system?

Federal Reserve Governor Lisa Cook stated that private credit does not currently present adverse risks to the financial stability of the United States. The central bank is now intensifying its monitoring of the sector to gain transparency into its rapid expansion.

Why it matters

The Fed is scrutinizing this market because its relative lack of transparency makes it difficult to assess how it could affect the broader economy. Monitoring ensures that potential vulnerabilities are identified before they impact bank lending or the financial system.

Bank lending commitments to business development companies surged to over $50 billion in 2025, up from $10 billion in 2013. Meanwhile, 50% of survey respondents cited private credit as a significant risk to their outlook.

The players

Lisa Cook

A Federal Reserve Governor who oversees monetary policy and financial stability regulation for the U.S. central bank.

Federal Reserve

The central banking system of the United States that manages interest rates, regulates banks, and ensures the stability of the financial system.

The details

Private credit has grown as banks increasingly provide capital to business development companies, a trend that may accelerate if proposed capital rules pass. These rules could lower the risk weight for senior securitization exposures from 20% to 15%, potentially incentivizing more bank financing for these assets. The Federal Reserve continues to track these developments through its semiannual financial stability report.

2013: Bank lending to business development companies totaled $10 billion.
November 2025: The previous Federal Reserve financial stability report was released.
2025: Bank lending commitments to business development companies surpassed $50 billion.
May 2026: The most recent Federal Reserve financial stability report was published.
October 1, 2026: Lisa Cook spoke at a New York Federal Reserve event.

Money Landscape

This assessment is part of the Federal Reserve's semiannual financial stability report, which tracks systemic risks to the U.S. economy. It follows a period of rapid growth in non-bank lending that has drawn increased regulatory attention to market opacity.

If you hold investments in business development companies, be aware that future changes to bank capital rules could shift sector profitability. Discuss potential exposure to private credit with a qualified financial professional to ensure your portfolio aligns with your risk tolerance.

The takeaway

While regulators currently see no systemic threat, the rapid shift of lending from banks to private credit remains a trend to watch for its impact on financial stability. Keep track of updates in future financial stability reports to understand how shifting bank capital requirements affect credit conditions.