The next financial crisis will probably originate from online lenders, hedge funds or other unregulated entities that are taking on some of the greatest credit risks, CIT Group Inc. Chief Executive Officer John Thain said.

"If you wanted to worry about the next crisis, you would worry about that space because that's where the more leveraged, the more risky pieces are going," Thain said Thursday in a televised interview. "They are not going into banks."

As the biggest U.S. banks struggle to adjust to new rules restricting credit, nontraditional lenders including hedge funds and private-equity firms are filling the gap. Banks also face rising competition from online companies such as LendingClub Corp.

Online lending platforms that make loans to less credit- worthy borrowers transfer that risk to other entities, Thain said. Unregulated firms like hedge funds and business development companies could experience losses and see asset prices drop when the credit cycle turns negative, similar to 2008, he said.

"What happens when we get into a bad part of the credit cycle?" Thain said. "Who is going to bear all those losses?"

Thain, 60, the former CEO of Merrill Lynch & Co. and previously a top executive at Goldman Sachs Group Inc., was named to run CIT in 2010 as the company emerged from bankruptcy. In the latest stage of its turnaround, CIT this week said its $3.4 billion acquisition of OneWest Bank was completed, marking one of the biggest deals in the industry since the financial crisis.

While Thain said that he isn't currently looking to pursue additional big bank-deals at this time, the OneWest deal should spur more lenders with less than $100 billion in assets to consider acquisitions.

CIT's turnaround also offered Thain a means of mending his reputation following the financial crisis, investors have said. After selling Merrill Lynch for a premium to Bank of America Corp. at the height of the crisis, he was pilloried for $27.6 billion in losses and an office remodeling that included a $35,000 commode.

On Wednesday, the U.S. Securities and Exchange Commission voted to require companies to reveal the pay difference between the CEO and their typical worker. The new rule "undercuts" the SEC's credibility because investors don't care about such gaps, Thain said.

"This is just a purely populist, political move and it's not of benefit to shareholders," Thain said in the interview. "Why don't we disclose what the top baseball player makes versus the guy who sells hot dogs in the stadium?"

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