Ex-Goldman CEO Blankfein warns private credit could trigger financial crisis
Lloyd Blankfein, who once led Goldman Sachs, thinks the financial world could be headed for a shake-up.
On Bloomberg's Big Take podcast, he pointed to private credit as a weak spot, saying, "We're due for kind of a reckoning... we've put money in places where write-offs are going to need to happen."
Blankfein's concerns about private credit
Blankfein flagged that private credit is often hidden and tough to trade—basically, it's not very transparent.
He described the situation as feeling familiar: "It sort of smells like that kind of a moment again. I don't feel the storm, but the horses are starting to whinny in the corral."
Private credit has grown rapidly, but if people rush to sell these assets under stress, things could get messy.
Blankfein's past and Goldman's current position
Blankfein ran Goldman Sachs from 2006 to 2018 and steered it through some rough times.
Interestingly, even though he's warning about risks now, Goldman itself deals in private credit too.
His time at the top wasn't spotless—back in 2010, Goldman paid $550 million to settle charges over misleading subprime mortgage info (though they didn't admit guilt).