Financial Times FT.com

Banks’ debts threaten growth

By David Wighton in New York

Published: October 16 2007 22:01 | Last updated: October 16 2007 22:01

Big US commercial banks have seen $280bn of new debt come on to their balance sheets since the credit squeeze, threatening to undermine economic growth by inhibiting their ability to make new loans.

The banks have been forced to take on to their books large amounts of commercial paper and leveraged loans after investor demand for such assets dried up in the summer.

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