Overview
- Speaking on Bloomberg’s Big Take podcast, the former Goldman Sachs CEO said markets are late cycle and "due for a kind of a reckoning" as hidden leverage and illiquid assets in private credit raise the risk of mispricing.
- Blankfein cautioned that opening complex private-credit products to everyday savers heightens potential fallout, pointing to President Donald Trump’s 2025 order easing private assets into employer retirement plans.
- Recent stress points include Blue Owl Capital pausing withdrawals at a retail-focused fund, the insolvency of UK lender Market Financial Solutions, and souring loans hitting some large asset managers.
- Broader concern has picked up as JPMorgan’s Jamie Dimon compared current behaviors to pre-2008 excesses and the KBW Bank Index posted its sharpest drop since April.
- Scrutiny of oversight is growing after a House of Lords panel cited rapid UK private-credit growth of about 56% since 2015 and criticized a passive policy response, even as some firms, including Goldman, note low redemptions in retail-oriented funds.