The credit crunch has become a real-world problem because when the cost of debt capital rises, everything is worth less. How are investment banks shaping up for the challenge ahead? Alex Chambers reports.
RARELY HAVE THE fortunes of the fixed-income markets been so keenly scrutinized. Six long months after the debt market first seized up it is still not functioning as it should. Normally the credit cycle turns in response to economic slowdown. But except for US sub-prime mortgage-backed securitizations and associated securities, most disintermediated credit has not yet deteriorated significantly.
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