Weekly Global Economic Update | Deloitte Insights
Week of April 13, 2026
Deloitte’s team of economists delivers an in-depth analysis of the latest economic developments around the world, highlighting key trends and potential risks shaping the global financial landscape.
Spotlight on Private Credit Growth and Systemic Risks
One of the most discussed topics this week is the rapid expansion of private credit in the United States, raising concerns among financial experts about potential systemic risks. Jamie Dimon, CEO of JPMorgan Chase, flagged the issue warning that when the next credit cycle emerges, losses on leveraged lending could be significantly higher than anticipated due to generally weakening credit standards.
What Is Private Credit?
According to the US Federal Reserve, private credit (or private debt) consists of non-publicly traded debt instruments offered by nonbank financial entities—such as private credit funds or business development companies—to privately held businesses. Notably, private credit operates outside traditional banking regulations, lacking the capital and disclosure requirements banks must follow. This regulatory gap contributes to reduced transparency and potentially increased risk.
Market Size and Growth
The private credit market has experienced extraordinary growth over the past two decades. Estimates place its current size between $1.4 trillion and $1.8 trillion, up from a mere $46 billion in 2000 and $1.0 trillion as recently as 2023. This growth far outpaces the roughly 25% increase in traditional bank lending over the past eight years, with private credit lending rising more than 130% in the same period.
Investors and Borrowers in Private Credit
Funding for private credit mainly comes from institutional investors such as pension funds, insurance companies, private equity firms, family offices, and sovereign wealth funds. To amplify returns, private credit firms also borrow from banks, which intertwines their operations with the regulated banking system—a key point fueling concerns about financial stability.
Borrowers increasingly turn to private lenders for the speed, certainty, flexibility, and customization that banks—hindered by stricter regulations—cannot always provide. Additionally, highly leveraged borrowers who struggle to secure adequate funding from regulated banks find private credit an attractive alternative.
Historical Context and Regulatory Factors
The prominence of private credit is partially a response to post-2008 financial crisis regulations, which tightened capital and lending standards for banks and their exposure to risky nonbank investments. Although nonbank lending initially shrank as a portion of total credit, over time, easing regulation along with market demands encouraged the rise of new forms of lending outside the traditional banking framework.
Assessing Systemic Risk
A critical question is whether private credit poses a systemic risk comparable to past financial crises. Nobel laureate Paul Krugman has explained that financial crises typically arise from a "mismatch between liquid liabilities and illiquid assets." If investors or lenders demand rapid repayment or redemptions that entities can’t meet without fire sales or asset devaluation, liquidity crises and bankruptcies can follow.
Applying this framework to private credit:
- The private credit market represents a smaller share of GDP compared to the nonbank securities that triggered the 2008 global financial crisis.
- Many private credit firms rely predominantly on equity from investors rather than short-term bank funding, mitigating some liquidity risks.
- Some entities have built-in limitations on investor redemptions, offering additional protection against sudden cash demands.
However, the interconnectedness with banks remains a concern. A study by the Federal Reserve Bank of Boston highlights that private credit lenders’ dependencies on bank credit lines could present systemic liquidity risks if multiple firms simultaneously draw down funds amid adverse conditions. Such events could strain banking institutions and propagate financial instability.
Other Notable Economic Highlights this Week
-
US Inflation and Consumer Confidence: Inflation in the United States has accelerated recently, leading to a noticeable drop in consumer confidence. The increase in prices is putting pressure on household budgets and could influence spending patterns moving forward.
-
Chinese Price Dynamics: Contrary to some expectations amid ongoing global disruptions, Chinese consumer prices have remained relatively stable. However, producer prices in China have accelerated, indicating rising costs upstream in the supply chain that may eventually impact consumer markets.
-
Continued COVID-19 Impacts: The global economy continues to feel the reverberations of COVID-19 disruptions, affecting labor markets, production, and supply chains in various regions.
About Deloitte Insights
Deloitte Insights is a leading source of proprietary research and analysis designed to help organizations turn their aspirations into actionable strategies. Covering a broad spectrum of topics including economics, human capital, technology, and industry-specific trends, the platform delivers timely content such as articles, videos, and reports.
For personalized insights and to stay updated on the latest trends impacting global business, professionals can subscribe to Deloitte Insights newsletters or visit the My Deloitte Dashboard for tailored content.
Contact
Ira Kalish
Chief Global Economist | Managing Director, Research & Insights | Deloitte Services LP
[email protected] | +1 310 420 0392
Stay Informed
Keep abreast of ongoing economic developments by following Deloitte Insights on LinkedIn, Twitter, and Facebook. For video content featuring expert commentary and data visualizations, visit Deloitte Insights’ YouTube channel.
This article was prepared using information available as of April 15, 2026, and aims to provide an informed overview of current economic trends and risks.