New York Fed Probes Wall Street Banks' Private Credit Exposure

Semafor··USGB·Read original
3▲0 ▼2Impact / 5
Summary · why it matters

The Federal Reserve Bank of New York is examining major Wall Street banks' lending to private credit firms, according to a report by Semafor. The New York Fed has been visiting banks including JP Morgan, Wells Fargo, Barclays, and Morgan Stanley to ask about their exposure, risk management, and collateral quality. The scrutiny was reportedly triggered in part by JP Morgan's markdown of a large part of its tech-related private credit portfolios. According to FDIC data cited in the Semafor article, loans from these banks to non-bank institutions rose from 300 billion dollars in 2016 to more than 1.5 trillion dollars, now accounting for 11% of all bank loans outstanding. The checks are not necessarily routine but are not abnormal for the New York Fed, and do not by themselves indicate a systemic problem.

Impact on assets 5

Financials▼
Wells Fargo & Company
WFC
▼ NegativeRegulationrelevance

New York Fed visited Wells Fargo to question its exposure, risk management, and collateral quality in lending to private credit firms.

Digital Finance & Tokenization▼
JPMorgan Chase & Co
JPM
▼ NegativeRegulationrelevance

New York Fed is probing JPMorgan's private credit exposure and risk management, triggered partly by its tech-related private credit markdown.

Cloud & Digital Infrastructure▲