Victoria Ivashina

We're just kind of pulling that out of our inventory and we're, you know, we're shipping it overseas.

But the U.S.

can't continue to be backstopped just through inventories for too much longer.

After the great financial crisis of the late aughts, interest rates were really low for a long time.

And so investors were like, well, this sucks.

How are we going to make money?

So they started snooping around for good places to put their wealth.

Victoria Ivashina is a professor at Harvard Business School.

A lot of investors realized, let's just do what banks do.

Let's lend money to businesses, but like new kinds of businesses, like software that banks are afraid of.

People who are not banks doing bank-like things, lending specifically, is called private credit.

And it took off.

It was exponential growth.

since after the financial crisis.

Private credit became even more popular when interest rates started to rise after COVID.

Big companies did not like that, and they didn't like how inflexible traditional banks were about loans.

So they started turning to private credit.

It reflects a broader trend of

Decline of traditional banking.

Tomasz Piskorski is a professor at Columbia Business School.