Jamie Dimon says there could be ‘hell to pay’ if the swelling private-credit market starts showing cracks

• “It could be hell to pay” if private credit markets fluctuate, Jamie Dimon said.

• He warned that there are bad actors in the industry, and they are likely to be the source of any problems.

• “I don't think it's systemic, but I expect there will be problems.”

C. B. Morgan Chase CEO Jamie Dimon said private credit could spark turmoil if the obscure sector of financial markets weakens.

“There may be hell to pay,” he said. He said at a conference Wednesday. “I saw a couple of these deals that were rated by a rating agency, and I have to admit, I was shocked by what they were rated for. So, it reminds me a little bit of mortgages.”

The private credit market – a pillar of finance dominated by non-bank lenders who provide loans to private companies – has grown rapidly in recent years. Although the returns on these assets have increasingly exceeded… Standard & Poor's 500 Since the early 2000s, Risks in the industry The IMF noted in April that these matters are not well known.

In Dimon's view, some of the players in this space are “brilliant”, and the sector is succeeding in meeting the financial needs of companies that larger institutions may ignore.

“But not all the people who do it are good,” Damon said. “Problems in financial markets are often caused by ‘bad guys’, that is, people who make mistakes.”

He said problems could start to arise as retail investors become increasingly exposed to this space and come face to face with private credit assets that may be illiquid, incorrectly labeled, or not stress-tested.

“Retail customers tend to go around the building and call senators and congressmen,” Dimon said, later concluding: “

Meanwhile, JP Morgan is looking to delve deeper into this same space, with the bank looking to acquire a private credit company to grow its footprint in the sector. Bloomberg mentioned. According to the outlet, the lender has also put it aside $10 billion in direct lending.

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