Masters: Post-2008 bank capital requirements directly fueled the private credit boom
Blythe Masters · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · Mar 25, 2024 · at 23:10
Blythe Masters, founding partner at Motive Partners and former J.P. Morgan executive, explains how post-2008 regulatory regimes catalyzed the rise of non-bank financial institutions.
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“What's changed very significantly over the last period since the great financial crisis is the amount of capital that is required to be held per unit of risk on a bank's balance sheet. The formulae are complex and there's many of them, but bottom line is that it's boiled down to more capital required for pretty much everything. The result of it is that the bank driven appetite for assets has declined relatively speaking. And what has moved into that space are alternative credit providers.”
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