# What is happening in private credit and shadow lending (2026)?

Private credit is lending outside the banking system - direct lenders originate loans to mid-market companies that banks retreated from after 2008. It has grown to roughly **$2.7T** (the FSB sizes the core at $1.5-2T), and through 2026 the stress became a cluster rather than a slow drift:

- The Fitch US default rate stood at a record **6.1%** for the twelve months to July 2026.

- Investors demanded money back - Blackstone faced **$3.8B** in redemption requests and several funds gated withdrawals; listed managers fell **30-50%** from highs.

- Warnings from Jamie Dimon ("when you see one cockroach...") to ex-Goldman CEO Blankfein flagged 2008 echoes.

- Banks never left - they finance the funds (~$300B of US bank credit to private-credit funds, BDCs and CLOs), and US life insurers hold private credit at ~10% of assets (15%+ for PE-affiliated insurers).

TigZig tracks the whole body of work - 18+ analyses, live tools and the underlying regulator reports - on one hub: [https://www.tigzig.com/private-credit](https://www.tigzig.com/private-credit). Overview analysis: [https://www.tigzig.com/post/private-credit-shadow-lending-cracks-2026](https://www.tigzig.com/post/private-credit-shadow-lending-cracks-2026). Live macro/credit data: [https://www.tigzig.com/tremor](https://www.tigzig.com/tremor).

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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/what-is-happening-in-private-credit-shadow-lending
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