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But Borders reiterated on Thursday that there was no assurance that any refinancing would arise, and that it could violate terms of its debt in the first quarter of 2011 and "experience a liquidity shortfall".
The news is so bleak that a recent rumor, later discredited, of a liquidity shortfall at one of the largest banks, Commerzbank, was enough to stir talk that Germany was facing a full-blown banking crisis.
"The negative outlook reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity shortfall," Moody's wrote in a note to investors.
As I wrote just last year, the Fed's decision not to rescue Lehman Brothers when the investment bank faced a liquidity shortfall in September 2008 was arguably an unforced error.
"If the steps that we are taking are not successful, we could be in violation of the terms of our credit agreements in the first quarter of calendar 2011, which could result in a liquidity shortfall," the company said of its efforts to find new financing.
That reinforces the feeling of a liquidity shortfall.
Similar(54)
Systemic risk arises when there is a breakdown in aggregate financial intermediation, which in turn results from aggregate capital shortfalls and liquidity shortfalls in the financial system.
We propose a model where systemic and non-systemic banks are exposed to liquidity shortfalls so that a lender of last resort policy is required.
The existence of systemic banks provides a rationale for the central bank to act as lender of last resort for non-systemic banks in a larger range of their liquidity shortfalls.
Even with effective risk management, crises will emerge and test the board, with potential situations ranging from unexpected departures of the CEO and other senior executives, rapid deterioration of business conditions, impending liquidity shortfalls, compliance violations, risk management failures or major disasters, public uproar over executive compensation and other challenges.
To that end, a recently announced partnership with American Express could be driving buzz around XRP. Ripple will be working with AMEX to "solve liquidity shortfalls in remittances by offering instant blockchain-based payments". Editor's Note & Disclosure: The author participates in cryptocurrency markets.
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