In this discussion, Peter Simon, co-head of U.S. Financials at CreditSights, and Meghan Neenan, head of North American non-bank financials at Fitch Ratings, delve into recent ‘cockroach risks’ in U.S. capital markets. They explain how credit quality for regional banks remains stable despite recent bankruptcies, and highlight minimal BDC exposure to distressed companies. The pair also explores liquidity risks from interconnectedness between banks and non-bank lenders, and the impact of falling rates on BDC dividends, all while emphasizing the strength of capital cushions.
