Consumer credit defaults fell in Q4 2025, but rising margin debt and risky lending raise future financial risks.

Consumer credit defaults declined in Q4 2025, but Whalen Global Advisors warns of rising market risks due to record margin debt and expanded bank lending to nonbank financial firms, particularly for margin loans and crypto-related activities. Despite a November selloff in AI stocks and crypto, top bank stocks including SoFi Technology, Goldman Sachs, and Morgan Stanley posted strong year-to-date gains. The report cautions that speculative behavior and increasing exposure could lead to future credit losses for financial institutions.