Ex-Goldman CEO Lloyd Blankfein sounds alarm on private credit — warning it ‘smells’ like 2008
NY Post
Former Goldman Sachs CEO Lloyd Blankfein has warned that the growing private credit market could lead to a financial crisis similar to the one in 2008, potentially affecting retail investors and the broader economy.
In an interview on Bloomberg’s “Big Take” podcast, the renowned moneyman said the $1.8 trillion private credit sector involves risks from hidden leverage, lack of liquidity and opaque assets.
He compared the situation to the subprime mortgage crisis, noting that these investments are increasingly being offered to individual investors through retirement accounts.
“We’re getting close to the end of the late stages of cycles on this, and we’re due for a kind of a reckoning,” Blankfein said.
He expressed concern that firms are promoting these products to retail clients just as risks are rising.
Private credit refers to loans made by non-bank lenders to companies, often outside traditional regulatory oversight.
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