Wall Street Holds Steady as Corporate Risk Rises

U.S. corporate default risk has risen 54% over the past decade, while financial institutions have kept a more stable credit profile, according to a Credit Benchmark report released on Oct. 22, 2026. The widening gap puts pressure on businesses and borrowers, even as the institutions holding their debt appear steadier.

“The U.S. credit market isn't moving in one direction, and that's what makes this cycle particularly challenging,” said Michael Crumpler, CEO of Credit Benchmark. He said corporate default risk had risen more than 50% over the past decade, while financial institutions remained relatively stable. In private credit, he added, underlying borrowers are deteriorating even as the funds holding those loans maintain stronger credit profiles.

Different risks for borrowers and lenders

Credit Benchmark’s U.S. Credit Spotlight 2026 draws on consensus credit-risk data from more than 40 global financial institutions. The report finds widening differences in credit risk across U.S. industries, financial institutions and private credit markets, raising questions about how the financial system absorbs economic pressures.

Private credit merits closer attention, the report says. Most rated U.S. business development companies, or BDCs, have investment-grade ratings. But their underlying borrowers with available ratings are predominantly non-investment grade and concentrated in the single-B category. That split leaves the funds and the businesses whose loans they hold on markedly different footing.

The report also points to increased use of payment-in-kind, or PIK, arrangements. These arrangements reflect pressure on borrowers facing higher financing costs and AI-driven disruption. The report identifies that pressure; it doesn't describe a community response or grassroots organizing around it.

AI’s uneven toll

AI investment is creating different credit conditions across industries. Companies supporting AI infrastructure development are seeing improving conditions, while businesses exposed to disruption face growing pressure. This isn't a rising tide for every company: the report describes gains for some and fresh burdens for others.

Hyperscalers face another risk. Expanding data centers and computing capacity requires large amounts of capital, which could increase leverage and expose lenders if demand or investment returns fall short. If that happens, lenders could face the consequences of weaker-than-expected demand or returns on capacity-building commitments.

Financing structures, technological disruption and policy changes may shape the next credit cycle, the report says. It sets those pressures alongside rapid AI investment, trade pressures and changing bank capital requirements. The report doesn't describe electoral or legislative proposals as remedies; it focuses on credit risk and conditions that may affect borrowers, funds and lenders.

Who measures the risk

Founded in 2015, Credit Benchmark describes itself as a provider of credit-risk data and analytics. It aggregates and anonymizes risk views from more than 40 global financial institutions, then produces independent, obligor-level credit consensus ratings and related metrics.

The company covers more than 125,000 legal entities, most of which lack public ratings. It says its data helps financial institutions improve credit assessment, benchmark internal risk views and identify emerging risks. Credit Benchmark is headquartered in London, with offices in New York and Bangalore. The company offers the full U.S. Credit Spotlight 2026 report.