Harvey Schwartz knows a thing or two about financial crises. His first job out of college as a bond salesman started on Black Monday October 29, 1987, a day the stock market crashed 22.6%. At Goldman Sachs, he navigated numerous market crises from the dot-com bust and global financial crisis to the pandemic.

Yet , Schwartz, 61, is not worried by what some Wall Street observers believe will cause the next large-scale financial meltdown: the $2 trillion private credit industry, in which non-bank investment firms like Carlyle lend money directly to companies. “If you think about systemic risk and financial crises, there is always too much asset concentration… [whereas] private credit is widely dispersed,” assured Schwartz to a room of bankers and investors at the Economic Club of New York last week. “You don’t have the margin-levered triggers for it.”

The private credit business has been booming for the last few years for alternative asset managers like Carlyle, but the industry now faces growing scrutiny after the collapse last year of autoparts maker First Brands and used-car dealership Tricolor, both of which borrowed heavily in opaque private credit markets. JPMorganChase CEO Jamie Dimon memorably warned in October about other potential private credit “cockroaches” awaiting discovery. Billionaire bond investor Jeffrey Gundlach, who predicted the........

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