In this episode of our Power and Consequences podcast, we (Gary Gensler and Simon Johnson) begin by discussing whether there is a “run” on private credit. And that leads us to wonder: is there an illusion of some kind for investors at the heart of this financial sector (Gary); and why should we care what happens in private credit, from a public policy perspective (Simon)?
To address these questions, we unpack what exactly private credit is (and is not), and from where it came. As usual, a bit of history (along with 1940s fictional character George Bailey) helps set in context the current situation. We start by pondering the run on Bailey Bros. Building and Loan in ‘It’s a Wonderful Life’. Jimmy Stewart (playing George Bailey) saves the day explaining to the panicked crowd, “The money’s not here. Your money’s in Joe’s house... and a hundred others.”
Over the past week, the pressure on some private credit funds has intensified – raising further questions about whether investors understood what they were getting into. Remarkably, this same week, the Department of Labor is now proposing to let a broad set of everyday people put their retirement money into these funds through their 401(k) accounts. Listen to our discussion and make up your own mind on whether or not this is likely to end well.
Gary also was interviewed about private credit on two recent shows: ‘CNBC Morning Call with Morgan Brennan’ and ‘Bloomberg Talks with Tom Keene and Paul Sweeney’. Both can be watched on our website’s In the News page.
Some additional reading follows, with a view to letting you dig into all sides of the debate.
“Retail Investors Will Be Ripped Off in Private Markets with SEC Approval,” Benjamin Schiffrin, Better Markets, February 26, 2026. Better Markets is a leading voice for investor protection, with many other laudable goals for the financial system. You should follow what Better Markets has to say about the 401(k) proposal. (Simon is co-chair of their academic advisory board.)
“Private Credit: Fact vs. Fiction”, a presentation by Apollo Global Management, December 2025. Industry heavyweights make the case for themselves.
“Essentials of Private Credit,” Blackstone. Another industry heavyweight.
“Clash of the Titans: The new Giants of Wall Street are Breaking Down Boundaries,” The Economist/Special Report, May 2025. Useful background, but a lot has happened in the past year.
“Why Private Credit is Creating Major Concerns Among Economists,” PBS NewsHour, December 11, 2025. Paul Solman is one of the best business explainers in the business.
And for those of you who enjoy history as much as Gary and I do, here are links relevant for some of the items we discuss:
“It’s a Wonderful Life”. The classic movie! Just remember that we now have the Federal Deposit Insurance Corporation (FDIC). But not for Private Credit…
“Barbarians at the Gate”. The classic book! A lot has happened since 1989.
“Renegades of Junk: The Rise and Fall of the Drexel Empire,” Bloomberg, April 1, 2015. A fascinating oral history – the protagonists speak for themselves.
This episode was recorded on March 26, 2026. This post was drafted by Simon Johnson.
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