FT Global Banking Summit: The private credit story - Competition or cooperation with finance?

Private credit has shifted from a niche "lender of last resort" to a primary source of capital for large, high-quality companies, effectively competing with broadly syndicated loans and high-yield bonds. This growth stems from the demand for flexible, certain cost-of-capital solutions and long-term strategic partnerships rather than simple regulatory arbitrage. Banks and private credit firms are increasingly operating in a symbiotic model, where banks retain advisory and transactional relationships while leveraging private credit’s capacity to underwrite complex, large-scale deals. Concerns regarding systemic risk remain largely unfounded due to the rigorous, operational-level underwriting processes and the stable, long-dated nature of private credit capital structures. These vehicles, often unlevered or modestly levered, provide a robust alternative to traditional bank lending, allowing for faster decision-making and more tailored support during challenging periods for borrowers.