Figure 14. Bank Capital Hit by Bond Losses, O昀케ce Exposure CONCLUSION share of their operating earnings from M&A and IPO underwriting, advisory work, transaction services, Narratives surrounding the disintermediation of banks and other fees. While direct lenders aspiring to enter have not flipped but become more nuanced. The share this territory may find themselves at a competitive of total credit market assets on bank balance sheets disadvantage, the actionable opportunity set is likely has dropped materially over the past 50 years and this to expand for private lenders in virtually every other trend seems certain to continue. As bank balance sheets direction. Appreciation for the asset-client distinction become more constrained, their lending decisions will and broader competitive dynamics may be the key to become more sensitized to relationship considerations, assembling the best-performing credit portfolios in the especially for large banks who derive a disproportionate years ahead. Figure 14. Source: Carlyle Analysis; Federal Deposit Insurance Corporation, March 2024; Federal Reserve Board of Governors, March 2024. There is no guarantee any trends will continue. 13