ABCP meltdown: bigger banks should escape
There was a good reason why IKB and SachsenLB were brought low by their asset backed CP conduits, and why other banks need not be. They had simply let the conduits get far too big, relative to their own balance sheets.
The recent crisis in the asset backed commercial paper market has left many questioning its future. The market may well have to undergo radical change in the next year or two; how severe it is and how much pain it causes for market participants remains to be seen.
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