The war in Iran and rising energy prices are not the only risk factor in the markets right now. What else is worrying experts and is a new major financial crisis possible?
Almost two decades after the bankruptcy of "Lehman Brothers", Wall Street sentiment is increasingly tense. Warnings of possible new shocks are growing. According to the former head of "Goldman Sachs", many underestimate how serious the risk of a new financial crisis is. "The longer the gap between shocks, the greater the risk that the next one will be even worse", the banker commented to the "Financial Times".
New risks facing the banking sector
"JPMorgan" CEO Jamie Dimon also sees parallels between the current situation and the time immediately before the 2008 financial crisis. During an investor meeting, he said he was very worried. The big problem, according to Dimon, is that due to increased competition, some banks are once again doing "stupid things" and granting risky loans. The same thing happened in 2005, 2006 and 2007.
Blankfine and Dimon's words are weighing on Wall Street – at the helm of their respective banking institutions, they experienced the last financial crisis firsthand, the German public media outlet points out.
Why private loans can become a risk
The situation in the private loan sector is particularly worrying - that is, those that are not granted by banks, but by funds and other private financiers. This market is growing rapidly - according to "Morgan Stanley" it has reached a global volume of three trillion dollars.
However, it is considered opaque and increasingly overloaded, points out ARD. Regulators warn that loans are being granted too easily. What is worrying in this case is that the private loan sector has also provided large-scale financing for software companies. According to the Bank for International Settlements (BIS), the volume of loans granted to software companies has increased from just under eight billion dollars in 2015 to over 500 billion at the end of 2025.
Fears about artificial intelligence lead to a collapse in software stocks
The rise of artificial intelligence (AI), which can independently write new code, is causing many investors to doubt the prospects of the industry, notes ARD. The MSCI World Software index has fallen by around 20 percent since the beginning of the year alone.
"The massive fall in software stocks due to AI fears has raised new concerns about private credit," market expert Robert Rotfeld told German public media.
A look at just one of the major private lenders, Blue Owl, shows just how deep the crisis of confidence is: shares are down 40 percent since the beginning of the year. The situation is similar at Apollo, KKR and Blackstone.
New stress over the war in Iran, oil prices and inflation?
The war in Iran has further exacerbated concerns about the private credit sector: if energy prices remain high for a long time, they will stimulate inflation and ultimately the issuing banks will have to intervene.
"However, if interest rates increase, the situation for companies drowning in debt will become increasingly critical", expert Retfeld emphasizes to ARD. In this situation, more and more investors will try to withdraw their money from private credit funds - until it reaches a point where the funds can no longer serve depositors. "This is the parallel with the previous financial crisis: then it was about mortgage loans, now it is about private loans."
BIS warns of new "shock sources"
If the private loan sector destabilizes, this could also threaten traditional banks, the German public media notes. According to the Federal Reserve, the promised credit lines from large US banks to the private loan sector at the end of 2024 amounted to $95 billion – i.e. they have increased more than tenfold within 11 years.
Therefore, the BIS recently warned: "Banks are financially supporting the private loan sector – and thus potentially create new sources of shock".
High US debt limits flexibility
Additionally, money for possible government bailouts is scarce, the ARD points out. US government debt currently stands at almost 125 percent of GDP. The US fiscal output is worse today than it was before previous crises, the Budget Control Commission warns. "The US has never entered a recession or other crisis with such high debt, such high deficits, and such little fiscal flexibility."
In short - the warning signs are mounting, ARD summarizes: the collapse of software stocks, the growing tension in the private credit sector and its close relationship with traditional banks. Weaknesses in the American financial system are becoming visible, the markets have become more vulnerable.
Now the important thing is how intensely and permanently the war in Iran will raise energy prices, respectively inflation. If interest rates increase, this will further increase the pressure on software companies and their creditors in the private sector. This would be the "perfect storm".