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In an environment of widening credit spreads and increased volatility, collateral calls are to be expected".
That is when balance sheets become impaired and widening credit problems start to show up.
The microfinance sector continued to grow, despite — and in some places because of — the widening credit crisis.
Bank of America said its first-quarter earnings fell 77percentt on write-downs and widening credit losses.
Both Moody's and Standard & Poor's recently downgraded Italy's debt ratings and warned of more to come, pushing up borrowing costs and widening credit spreads.
The previous crises in Russia and Latin America had left a deeply ingrained fear of sudden liquidity shocks and widening credit spreads.
Similar(32)
By reducing the panic-induced part of widening credit-spreads, the new liquidity tools mitigate the damage that dysfunctional credit markets would otherwise wreak on the economy.
First, because corporate borrowing on any serious scale is likely to push up interest rates even further than Alan Greenspan will, and to help widen credit spreads.
Fixed income sales and trading net revenue fell 8percenttoto $1.9 billion, because of widening of credit spreads on certain long-term debt.
The second factor: The takeover and balance sheet "releveraging" boom is now on hiatus, as risk spreads in the credit markets have materially widened (higher credit costs means lower equity prices).
Those concessions will likely create "a German empire" with a widening gulf between credit countries and the periphery of permanently depressed debtors that they support.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com