Credit and liquidity

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Credit and liquidity

After years of hearing about banks giving away both their liquidity and their credit too cheaply, the situation appears to be starting to change. The demise of Lehman has removed a serious and well-respected e-commerce operation. This appears to have encouraged certain banks to widen their spreads out this week. For the moment, though, there are still others prepared to carry on with business as normal. There have also been rumours about changes in the prime brokerage landscape, which is inevitable. Given what’s happened, it won’t be too surprising if both credit and liquidity are repriced.

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