Private credit

Cracks beneath the surface of private debt resurface

Signs that bring back memories of what happened with the subprime mortgage crisis

by Gianfranco Ursino

1 March 2026

2' min read

Translated by AI

Versione italiana

2' min read

Translated by AI

Versione italiana

The creaks that have been felt repeatedly over the past year in the US private debt market are raising serious concerns about the quality of the now massive credit provided to companies by non-banks. We are talking about more than $2 trillion.

Margin squeeze and leverage increase the risk of insolvency. The comparison with the subprime mortgages that ignited the 2008 financial crisis echoes with increasing frequency in the operating rooms, particularly after the Blue Owl case. Here too, the opacity of the private debt sector, characterised by heterogeneous portfolios, low liquidity and a lack of unambiguous market references to assess its profitability, makes the processes of analysing an investment proposed even to small investors difficult - if not impossible. And at the first signs of propagation of the private debt crisis in Europe, markets will have to be ready for a new systemic shock.

The first warnings emerged in Germany at the end of 2025, when the retirement fund of German dentists (Vzb) declared that it had lost EUR 1.1 billion largely due to investments in private debt. In recent days another alert came from the UK, where the private credit company Market Financial Solutions filed for insolvency. Although in the latter case the problem appears to be more one of fraud and mismanagement than of the market.

Signs that bring back memories of what happened on 8 August 2007, when the emergence of anomalies in the valuations of three Parvest money funds of Bnp Paribas sanctioned the exposure of European investors to subprime mortgages as well. It was no longer a crisis relegated to the US. The liquidity on the markets evaporated, and a crisis of confidence among financial players erupted. Banks no longer trusted each other.

There are significant parallels between the emerging private debt crisis and subprime mortgages. Both involve rapid growth of high-risk loans, low transparency, high leverage, and potential disruptive effects. A mix that could therefore amplify stress scenarios in the markets.

But besides similarities, there are also differences that limit equivalence. Some considerations suggest that the private debt crisis may not replicate the scale of the subprime crisis, primarily because of the lower exposure of the retail public and the reduced interconnectedness with the banking system. Two distinctions, however, that are fading.

On the one hand, savers are increasingly involved directly and even indirectly with the growing exposure to private debt on the part of pension funds and professional funds that manage their retirement savings, with risks that are perhaps not exactly compatible with their mission of guaranteeing a future pension.

On the other hand, banks, which are less inclined to finance high-risk companies, are, however, forging strong links with private credit operators. In particular, in addition to providing loans or even co-investments, banks are investing directly in private debt funds or setting up their own. They also act as intermediaries to place the funds to their clients.

Even the subprime mortgage affair until 2008 seemed relegated to a specific and delimited segment of the market. Then we all remember how it ended.

Gianfranco UrsinoResponsabile Plus24
- @g_ursino
Luogo: Milano
Argomenti: Fondi comuni, Etf, Assicurazioni, Conti correnti, Conti deposito, Mutui, Polizze fideiussorie, Anatocismo, Usura, Risparmio postale, Libretti Coop, Banche, Borsa, Consob, Banca d’Italia, Abf, Acf, Oam, Ocf, Consulenza finanziaria, Fondi pensione, Casse di previdenza, Fintech
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