The White House's executive order enables everyday investors to engage in private markets, raising potential risks for a looming financial crisis. Private equity and private credit, aspects of these markets, are largely unregulated. Private equity involves using both investor and borrowed funds to acquire companies, while private credit lends money to businesses, functioning like unregulated banks. These industries face scrutiny due to their lack of transparency and risky practices, with industry leaders warning of potential consequences if loans fail, signaling trouble ahead for investors in these opaque markets.
President Donald Trump has issued an executive order allowing regular investors to gamble money in the private markets, potentially leading to a financial crisis that harms the general public.
Private equity and private credit operate with minimal oversight, making riskier and less transparent deals, which raises concerns about their impact on economic stability.
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