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Fed Reveals $349B Private Credit Funds Owed by Banks
The Federal Reserve has revealed that US-domiciled private credit funds owed banks $349 billion at the end of 2025. A Boston Fed study found that about 10% of loans used payment-in-kind interest by early 2026, up from about 6% in 2022. The article also mentions that private credit funds can count interest as income even when borrowers haven't sent them any cash, creating a mismatch between interest income and cash collected.