Carlyle Group CEO Harvey Schwartz told Bloomberg News that credit in a late cycle should be on a “worry list.”
Schwartz, who refers to himself as the private equity giant’s “chief worry officer,” sees resilience, however.
“Any time you’re very late cycle like this, any news item could be disruptive to a market on any given day,” he told Bloomberg. “I think that we haven’t had really a recession-driven credit cycle in a very, very, very long time, and so people are right to be concerned when they see credit underperformance.”
But Schwartz also said that on the bigger issue of systemic risk, “even if we go through a credit cycle” it doesn’t mean that things will crumble.
Bank stocks have been volatile in the past week over concerns about regional bank exposures to credit, particularly loans tied to two bankrupt auto-industry companies.
