Financial Times FT.com

Commercial paper could add to banking woes

By Peter Thal Larsen, Anousha Sakoui and Jeremy Grant

Published: September 25 2008 23:15 | Last updated: September 25 2008 23:15

When the first wave of the credit crisis struck in the summer of 2007, some bankers saw it as a dress rehearsal for what could be an even more worrying scenario.

The sudden decision by investors to stop buying asset-backed securities, particularly those based on US mortgages, was difficult for the banking system. What would be even worse, however, would be if companies were no longer able to issue commercial paper.

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