Breaking News..Banks Resolve Liquidity ProbleBanks and pension funds join to settle asset-backed commercial paper disorder
Thu Aug 16, 9:39 AM
Email Story IM Story Printable View TORONTO (CP) - In a dramatic move, a group of financial institutions has announced an agreement to resolve the liquidity problem in the commercial paper market.
A number of big players in Canadian capital markets conferred Thursday in Montreal and agreed to convert short-term, third-party, asset-backed commercial paper into floating-rate notes that will not mature until the underlying financial assets do.
"Existing liquidity facilities will therefore not be necessary and will be cancelled and all outstanding liquidity calls will be revoked," the institutions stated.
A global credit crunch, traced back to the U.S. mortgage market, has threatened to ensnare a growing number of companies around the world, jeopardizing the stability of financial markets.