Private credit & banking system are sound

Despite concerns about bad loans at midsize U.S. banks, a senior analyst at Moody's Ratings concludes there is scant evidence of any system-wide trouble.

Marc Pinto, head of global private credit at Moody’s, admitted on CNBC’s Squawk Box that loosening lending standards and relaxed loan-terms are a worry, but said when the system is viewed as a whole, there’s no clear sign of contagion that could spark a broader financial crisis.

“When we dig deeper… and look to see if there’s a turn in the credit cycle, which is effectively what the market seems to be focusing on, we can find no evidence,” Pinto said. “Now that’s what we’re seeing today. That could always change. But if we look at the asset-quality numbers that we’ve seen over the last several quarters, we’re seeing very little deterioration at all.”

He noted that default rates on high-yield debt have remained under 5% this year and should dip to about 3% in 2026, a stark contrast to the double-digit defaults seen during the 2008 financial crisis. Pinto also pointed out that U.S. economic growth has outperformed many expectations, and said the word he is hearing from nearly 2,000 bankers at a conference he’s attending is “resilience.”