David Solomon

you know, a systemic crisis.

And I don't see anything in the context of a handful of bad credit situations that's leading me to say that we have a systemic issue around the corner.

Unfortunately, you know, lenders make mistakes.

There is fraud in markets.

And, you know, that's something that as lenders we all have to try to protect against.

But we should not be fooled by the fact that this is a very robust credit environment.

Credit spreads are tight.

And when we do have a cycle, which probably will come when there's an economic slowdown, there will be losses and we'll feel that across the economy.

I don't think about, when I think about lending, I don't think about, you know, easy money.

You know, lending is an activity, whether it's private credit or it's banks lending activity, lending is a through the cycle activity.

There's no question when spreads are tight,

you actually earn lower relative returns.

But the real alpha for credit market participants comes in the tough cycles when you have to restructure credits, you have to have more conviction to enter credits because you can earn higher returns.

And so the real alpha in long cycle credit investing comes from being able to manage not just at times when credit is

credit spreads are tight, but also when there's a difficult cycle.

And so, you know, I don't think about it as easy money.

If you're a lender, you're a lender.

You participate and you hopefully have good underwriting standards.

You take good reserves.

And so when there is economic pressure and there are losses, you can smooth through the cycle your returns to a reasonable place.