Wall Street ponders what happens to booming private credit market when you-know-what hits the fan

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The CEO of one of the largest private-credit firms defended the industry and how it will act in times of stress.

The explosion of private credit has been met with a whole host of concerns, but among the louder ones more recently is that the industry has not experienced a downturn at scale. And therefore, what does that mean for borrowers when there's some kind of crisis?

In other words, he said,"private credit hasn't dealt with high interest rates, hasn't dealt with the recession, and it hasn't dealt with high spreads."The next day, the CEO of one of the largest private-credit firms defended the industry and how it will act in times of stress. When asked on CNBC about Dimon's recent comments,

Ares' Executive Chairman Tony Ressler, sitting next to Arougheti in the CNBC interview, said the growth in private credit will"actually reduce systemic risk." We obtained updated figures on Thursday from KBRA DLD, which showed more of a mixed picture when it comes to implied recoveries. The average post-default value of a direct loan was about 53.1 percent, below that of syndicated loans, which were 57.5 percent but higher than high-yield bonds, which were 46.3 percent

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