Risk Migration from Banks to Non-Bank Lenders

The conversation examines whether risk migrating from banks to non-bank lenders and structured vehicles poses systemic danger. The speaker argues a full GFC-style event is unlikely, but identifies the key contagion channel: illiquidity in private credit forcing sales of public market assets. Liquidity deterioration has already been observed. The more probable systemic risk remains an unpriced inflation shock rather than a private credit collapse.