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The Guardian - UK
The Guardian - UK
Business
Kalyeena Makortoff Banking correspondent

What is private credit, and should we be worried by the collapse of US firms?

Tricolor office
Ths collapse of the the sub-prime auto lender Tricolor prompted worries about the private credit sector. Photograph: Bloomberg/Getty Images

The collapse of two US firms, First Brands and Tricolor, has shone a light on private credit and its growing influence in the global economy.

The failures have led to ballooning losses at traditional banks, and, coupled with worries about the health of US regional banks, have raised concerns about weak lending standards and potential threats from an opaque corner of the so-called shadow banking sector.

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