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Commercial paper: The engine starts slowly turning over

By Anousha Sakoui

Published: October 28 2008 13:27 | Last updated: October 28 2008 13:27

When Lehman Brothers collapsed into bankruptcy, it proved a tipping point for money markets, in particular the pools of short term debt called commercial paper (CP), which banks and corporations use to fund day-to-day activities.

A year into the credit crunch, the unthinkable happened and banks all but stopped lending to each other. As a result, some of the world’s largest corporations were reduced to struggling to refinance debt on a daily basis.

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