Bank Turmoil Is Paving the Way for Even Bigger ‘Shadow Banks’
Summary
“It actually is good for players like us to step into the breach where, you know, everybody else has vacated the space,” Rishi Kapoor, a co-chief executive of Investcorp, said on the stage of the Milken Institute’s global conference this week. “We’ve demonstrated over time to be a reliable form of capital that’s really emerged at the forefront, as banks, in this environment at least, have retrenched,” Mark Jenkins, head of global credit at Carlyle, told DealBook. Direct lending may get another boost as regional banks pull back, particularly in commercial real estate like office buildings, where landlords may be looking to refinance at least $1.5 trillion in mortgage contracts over the next two years, Morgan Stanley analysts estimate. has called for tougher regulatory oversight, and U.S. Treasury Secretary Janet Yellen said last month that she wanted to make it easier to designate nonbanks as systemically important, which would enable regulators to tighten scrutiny. “We don’t operate with the risk profile of financial firms that have fallen into trouble, almost always due to the combination of a highly leveraged balance sheet and a mismatch of assets and liabilities.”