"Two months ago, I would have said the chances of a credit crunch were too small to measure," says the head of syndicated loans at a big American bank. "Now, they are better than evens." The signs are ominous: low new-issue volumes for corporate securities, both debt and equity; falling amounts of loans extended by commercial banks; and a higher price for borrowing. A fairly benign explanation of the low volumes is falling demand for money among companies, after a surge of investment in the 1990s. Few companies, after all, want to build factories these days, or invest so much as they once did in information technology. Overcapacity remains. Meanwhile, the suspicion that consumers must soon cut back on their heavy spending justifies inventories kept as lean as possible, along with their financing. Yet evidence continues to grow that the supply of capital is being shut off, too. It is a process that started with the riskiest se-curities―that is, junk bonds and new issues of shares―but is now spreading to the safer parts of the credit markets, including those for bank loans and for high-grade corporate bonds.
展开▼
