What future for banks?

Author: | Published: 15 Dec 2016

Banks have found themselves competing with direct lenders in the aftermath of the 2008 financial crisis. But they still have a key role to play in the global markets

At the end of 2005, European-focused direct lending was nearly non-existent, firms having raised no specifically allocated funds that year. Just ten years later, European-focused direct lenders raised a record $18.8 billion, after raising a record $12.7 billion in 2014, and held more than $42 billion of unspent capital – more than half the size of the overall EU leveraged loan market that year. In the first quarter of 2016, the trend seemed to have continued as a single fund completed a record €2.5 billion ($3.68 billion) fundraising.

Much of the growth in direct lending can be attributed to the market conditions following the global financial crisis of 2008. As investors hunted for yield and borrowers with less-than-prime...



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