Commercial paper is a way of borrowing money for short periods, typically ranging from overnight, to less than a week, and such contracts have become all but untouchable since the credit markets seized up.
Banks in the UK and US, as well as continental Europe, are finding it harder to raise money from conventional, commercial sources and are become excessively dependent on borrowing from central banks.
With only limited access to cheap borrowing, the Angolan government has turned to commercial, oil-backed debt.
Last year, while government ministers were promising an imminent recovery, Assa's sceptical bosses made big job cuts, sold part of its headquarters (while there were still buyers for commercial property in Buenos Aires) and thus cut its borrowing.
Debt underwriting may have peaked, but it is still strong: all the investment banks are doing well in Europe, where companies are at last borrowing from capital markets, rather than sticking with commercial banks.
Commercial paper became the rage in the 1960s as a means of borrowing short-term money and saving interest costs by bypassing the banks.
Midwest Fertilizer Corp. officials estimate they shaved off up to two percentage points, to about 5% from about 7%, borrowing through the disaster-bond program compared with typical commercial financing.
There is a danger that at some point a big commercial bank will run out of the collateral or assets needed for emergency borrowing from the European Central Bank or its relevant national central bank.
Commercial paper represents 47.7% of GE Capital's short-term borrowing.
Tuesday, Treasury Secretary Henry Paulson told the Chamber of Commerce that investment banks should be more closely scrutinized by the Federal Reserve (make that scrutinized at all, really) now that they enjoy the privilege of borrowing short-term funds directly from the central bank, just as commercial banks have been allowed to do for years.
There is a desire to turn Wall Street firms into commercial banks, with the heavy regulation and capital requirements that come with the privilege of borrowing directly from the Fed in times of need.
If the credit squeeze spreads and borrowing becomes harder, not just for housing but across other parts of the debt markets (such as commercial property or credit cards) money-market funds could withdraw even further from lending to banks.
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