Wall Street banks are raising billions to regain market share in debt-backed deals after a two-year dominance by private equity and asset management firms.

The Federal Reserve’s interest rate hikes in 2022 led to decreased lending to business customers with poorer credit risk and rising borrowing costs, particularly for heavily leveraged transactions.

After the Fed’s monetary tightening paused, the credit markets rebounded, incentivizing banks to reenter leveraged finance.

The $1.5 trillion syndicated loan industry has experienced a resurgence this year, with the direct lending industry being around half that of the syndicated market.

Private lending companies are expanding their lending operations to include consumer and real estate loans, and the markets for private credit and syndicated loans are expected to look more alike over time.