Former SEC chair Jay Clayton recently defended the private credit industry, stating he does not see excess leverage building in the sector. His comments come as the alternative lending market continues expanding rapidly, with private credit funds managing hundreds of billions in assets.

Clayton, who led the SEC during a critical period, argues that private credit helped the US recover faster than Europe from the 2008 financial crisis. During the crisis, when traditional banks faced capital constraints, private credit markets provided an important alternative funding source for companies.

The former regulator points to private credit's role in bridging funding gaps when public markets froze, enabling American companies to access capital more readily than European firms. This historical perspective informs his assessment that current leverage levels appear manageable relative to pre-crisis conditions.

Clayton's defense comes as regulators closely monitor leverage across alternative lending platforms. His perspective that the industry helped drive America's faster recovery offers a contrarian view amid concerns about potential excesses in the private credit boom.