JPMorgan identifies key liquidity backstops as private credit redemptions mount in World Economy News 23/03/2026 JPMorgan Chase & Co. (NYSE: JPM) strategists have identified a series of critical “liquidity backstops” for the private credit market, providing a counter-narrative to mounting fears of a systemic crunch. In a new Flows & Liquidity report, the firm suggests that while the $2 trillion asset class is navigating a “volatile transition,” significant unutilized lending commitments and a surge in secondary fund “dry powder” are acting as vital shock absorbers. The analysis comes as the industry grapples with a spike in redemption requests and a selective repricing of assets, factors that have sparked concerns of a wider contagion in global credit markets. The “dry powder” buffer The primary defense against a liquidity vacuum, according to JPMorgan, lies in the sheer volume of sidelined capital within secondary funds. Designed to purchase existing loan stakes from stressed sellers, the financial vehicles have raised record amounts of “opportunistic” cash to capitalize on any resulting volatility. Strategists led by Nikolaos Panigirtzoglou note that these secondary players, alongside generalist funds seeking alpha, are positioned to provide an “exit ramp” for investors without triggering a firesale of underlying assets. The report also highlights that the “re-emergence of the U.S. dollar as a hedge” and the rise of decentralized exchanges like Hyperliquid have provided investors with new avenues for price discovery during off-market hours. The diversification of trading venues is helping to mitigate the traditional “illiquidity premium” that often traps capital during periods of geopolitical stress. Publicly traded Business Development Companies (BDCs) have seen a 16% sell-off over the past year, but JPMorgan argues that much of the “AI-driven scare trade” in software-linked loans is already reflected in current valuations. Navigating “collateral haircuts” Despite the outlined backstops, the sector faces immediate friction as Wall Street banks begin to reassess “collateral haircuts” on the credit facilities they provide to private lenders. JPMorgan’s own move to mark down certain software-heavy loan portfolios, citing vulnerability to artificial intelligence disruption, has reduced the available leverage for some boutique funds. As bank-led liquidity tightens, it is forcing a “bifurcated” outlook, where top-tier managers maintain access to capital while smaller, more concentrated players face “gating” or restricted withdrawals to protect their net asset values (NAV). The “K-shaped” trajectory of the private credit recovery will likely be dictated by interest coverage ratios, which have stabilized at roughly 2.0x for direct lending. Investors regard the “collision course” between rising redemption demands and a more prudent banking sector as a primary tail risk. However, as institutional capital, which is typically less sensitive to short-term shocks, represents 80% of the investor base, JPMorgan remains skeptical that the current “liquidity test” will morph into a systemic failure comparable to the 2008 financial crisis. Source: Investing.com 2026-03-23 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, f