The Private Credit Crisis, Explained
May 1, 2026
How shadow banking puts the economy at risk.
The Roosevelt Rundown features our top stories of the week.
What they do in the shadows
The rapid growth of the private credit market, as well as recent bankruptcies at firms like First Brands that took on risky loans, are raising concerns among investors and financial analysts. This week, Roosevelt Senior Fellow Graham Steele, former assistant secretary for financial institutions at the Treasury Department, sat down for a conversation with Roosevelt President and CEO Elizabeth Wilkins to break it all down.
“How concerned should we be? The short answer is, we really don’t know,” Steele said. “The agencies that are responsible for tracking these risks, like the Securities and Exchange Commission or Treasury Department, have by and large been asleep at the switch for a lot of the growth of these markets.”
In an accompanying blog post, Roosevelt’s Brad Lipton explains how private credit firms engage in bank-like activity but operate outside the regulations governing banks. Also known as “shadow banking,” this puts workers, consumers, and the broader economy at risk.
Read and watch: What’s Going on with Private Credit? (with Graham Steele)
What else we’re up to
- The Trump admin is putting retirement at risk: Opening up workers’ retirement accounts to risky investments—like private credit—is not democratization, Roosevelt Senior Fellow Lenore Palladino writes in Dollars & Sense: “The proper goal of financial regulation is to protect workers’ savings and direct investment toward productive ends, not to expand the customer base of unregulated finance.”
- There’s a financial cost to informal caregiving: Business Insider reports on the American women who become informal caregivers to their aging parents, and the lost earnings, depleted retirement savings, and labor force dropouts that come with it. The piece references Roosevelt’s recent brief about the impacts of long-term care costs on intergenerational wealth.
- Join us in New York City! Roosevelt is excited to be cosponsoring Good Jobs and Inclusive Growth: The Fight for a People’s Policy and New York City, presented by The New School for Social Research’s economics department.
- The all-day event is co-organized by Roosevelt Institute alum Jess Forden and will feature a host of Roosevelters, from Senior Fellow Darrick Hamilton to Network alum Sam Levine.
What we’re talking about
