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Analysis Private credit
Watch out for the cockroaches
After the collapse of First Brands, some of the biggest hitters in global finance have been quick to argue that any bugs in the system won’t affect them — but are bad news for everyone else
14 October
When you see one cockroach...
Jamie Dimon
CEO of JPMorgan
3Q earnings call, 14 October
“My antenna goes up when things like that happen. I probably shouldn’t say this but when you see one cockroach, there’s probably more. And so everyone should be forewarned...”
14 October
I don’t see the relevance
Marc Lipschultz
Co-CEO, Blue Owl
CAIS Summit
“He’s trying to interpret it, so I guess he’s saying there might be a lot more cockroaches at JPMorgan, or I’m not sure…
“I also think it’s like a really colourful way to phrase something, but I actually don’t see the relevance... There will always be bankruptcies.”
16 October
It’s all one system
John Waldron
President, Goldman Sachs Group
Semafor World Economy Summit
“I don’t really understand why we’re talking about private credit as one thing and lending in the banking system as another thing. There’s one system.”
16 October
We don’t see many cockroaches
Kristalina Georgieva
President, IMF
Annual meeting in DC
“This is why we are urging more attention to the non-bank financial institutions... I can tell you that we are very watchful on developments.
“So far, [we don’t see] that many cockroaches.”
21 October
Are these canaries?
Andrew Bailey
Governor of the Bank of England
House of Lords financial services regulation committee
“If you were involved before the financial crisis or during it, alarm bells start going off. Are these cases... the canary in the coal mine? ... That is still a very open question.”
23 October
It started with bank-syndicated credits
Stephen Schwarzman
CEO, Blackstone
3Q earnings call
“These events have been erroneously linked to the traditional private credit market... Importantly, the defaults in focus resulted from bank-led and bank-syndicated credits — not private credit.”
23 October
I don’t find it systemic
Henry Kravis
Chief executive chairman, KKR
Bloomberg TV
“I worry about those firms that don’t have a driver’s licence, that have decided they want to get into private credit, have no way to drive, haven’t passed a test or anything. Will they have problems? They could. I don’t find it systemic.”
29 October
It’s mainly public credit
Tristram Leach
Co-head, European credit, Apollo Global Management
House of Lords financial services regulation committee
“First Brands was predominantly financed in the public credit markets... There have also been reports of allegations of fraud around First Brands.”
30 October
It’s not a broad credit issue
Jerome Powell
Chairman, Federal Reserve
FOMC speech
“I don’t see, at this point, a broader credit issue. But we’re going to be monitoring this quite carefully and making sure that is the case.”
30 October
Cockroaches aren’t termites
Mohamed El-Erian
Allianz chief economic advisor
X post
“JPMorgan’s CEO is absolutely correct to warn [us]. As to the implications for financial stability, I would note that cockroaches are not termites... unlike termites, they don’t eat away at the foundation.”
30 October
People are in an imaginary world
Marc Lipschultz
Co-CEO, Blue Owl
3Q earnings call
“Just talking about this enough, people have worked themselves into this imaginary world where there’s some big or potential credit problem.”
