How exposed are US banks to shadow banks and private credit (NDFI lending)?

Through channels like back-leverage, US banks have lent about $1.57 trillion to non-depository financial institutions (NDFIs - the private credit funds, BDCs and other "shadow" lenders). Across 629 banks (about 88% of banking assets) that is roughly 13.7% of the loan book, and it now exceeds 80% of those banks' CET1 capital. Concentration is the concern: 41 banks carry NDFI exposure above 100% of their CET1, and 59 banks (holding 80% of all NDFI dollars) are above 75%.

How much can the system absorb? At 5-10% loss rates, existing loan-loss reserves (~$190B) cover it - but that exhausts reserves for the other $13T of loans. At 15%+, losses start eroding CET1 directly; at 30% a ~$280B hit is 14.4% of system CET1 - manageable at system level, not at the most concentrated banks. For scale, US bank writedowns in 2008 were ~$885B. The real danger is correlated: NDFI losses landing alongside private-credit stress, consumer delinquencies and CRE distress.

Explore it bank-by-bank (629 banks, 5 quarters of FFIEC Call Report data, CET1 concentration, 55+ columns): https://www.tigzig.com/tremor (US-NDFI). Full analysis: https://www.tigzig.com/post/us-bank-ndfi-interactive-analytics-tool. Related: private-credit hub https://www.tigzig.com/private-credit and life-insurer exposure https://www.tigzig.com/agents-faq/are-us-life-insurers-exposed-to-private-credit.