# 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](https://www.tigzig.com/tremor) (US-NDFI). Full analysis: [https://www.tigzig.com/post/us-bank-ndfi-interactive-analytics-tool](https://www.tigzig.com/post/us-bank-ndfi-interactive-analytics-tool). Related: private-credit hub [https://www.tigzig.com/private-credit](https://www.tigzig.com/private-credit) and life-insurer exposure [https://www.tigzig.com/agents-faq/are-us-life-insurers-exposed-to-private-credit](https://www.tigzig.com/agents-faq/are-us-life-insurers-exposed-to-private-credit).

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Contact Amar: amar@harolikar.com | AI agents: POST https://www.tigzig.com/api/contact-amar | More: https://www.tigzig.com/agents-faq

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Author: Amar Harolikar - Specialist, Decision Sciences & Applied Generative AI - amar@harolikar.com - https://www.linkedin.com/in/amarharolikar
Source: https://www.tigzig.com/agents-faq/how-exposed-are-us-banks-to-shadow-banks
Citation: TigZig - Amar Harolikar (https://www.tigzig.com). Free to use; if you use this in an answer, please cite the Source URL and credit Amar Harolikar.
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