Veteran who predicted 2008 warns four risks could make next crisis worse

Richard Bookstaber, the risk manager who foreshadowed the 2008 crisis, warns that a handful of compounding pressures could make the next downturn more damaging. He spent decades at firms such as Morgan Stanley and Bridgewater and later worked at the US Treasury and the SEC.

In an op-ed he wrote that 'We have returned to a period of risk, one rife with the sort of pressures that have led to major financial crises.' Private credit is one key stress. Asset managers including Blue Owl, BlackRock, Blackstone, and Morgan Stanley limited redemptions for some funds, sparking liquidity fears as investors rushed for the exits.

Bookstaber noted companies now rely more on institutional lenders and that 'these loans rarely exchange hands, leaving investors uncertain about what these instruments are really worth or how easily they could be sold if conditions deteriorate.' Observers have warned those freezes could be a canary in the coalmine.

United States

richard bookstaber, 2008 crisis, private credit, liquidity risk, redemption limits, asset managers, blue owl, blackrock, blackstone, morgan stanley