Citi CEO sees no systemic risk in private credit unless 3 factors converge

Citi CEO Jane Fraser said she was "sanguine" about risks in private credit, seeing mainly "idiosyncratic risk" from firms with weak credit standards rather than a systemic threat. She made the comments on Tuesday at RBC's Global Financial Institutions Conference.

Fraser warned the outlook could change if three pressures aligned: a prolonged Middle East crisis, cracks in private credit, and worries about AI valuations. "Where it gets a little more concerning would be if the Middle East crisis goes on for a long time, and you see a convergence of the concerns on AI valuations," she said, adding that a convergence of those forces "would be more problematic." Private credit has drawn heightened scrutiny after redemption requests at high-profile funds, and Blackstone and BlackRock recently capped withdrawals from nontraded private-credit funds.

citi, jane fraser, private credit, systemic risk, idiosyncratic risk, middle east, ai valuations, redemption requests, blackstone, blackrock