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Wednesday, March 4, 2009


U.S. strives to revive securitized lending market
The U.S. Treasury and the Federal Reserve launched a program that aims to boost lending to businesses and consumers. In mid-March, hedge funds, private-equity firms and other large investors will be able to obtain credit inexpensively from the Fed. The government wants investors to use the money to purchase securities backed by new consumer and business loans. The Washington Post (04 Mar.) , Reuters (03 Mar.)

Financial regulators hint at further curbs on risk, size
In testimony before the U.S. Senate Budget Committee, Federal Reserve Chairman Ben S. Bernanke criticized moves by American International Group. His remarks, which were echoed by Treasury Secretary Timothy Geithner in separate testimony, mean large financial institutions in the U.S. will likely face new restrictions. "There will either be more extensive regulation, a requirement for more capital or a stated preference against companies getting too big, or, more likely, all of the above," said Kevin Fitzsimmons, managing director at Sandler O'Neill & Partners. Bloomberg (04 Mar.)

Gauge shows more European firms heading toward trouble
The Markit iTraxx Crossover index has hit a record high, implying that more subinvestment-grade European companies will likely not meet their debt obligations. "Investment-grade credit has already been telling us this is going to be at least the worst economic crisis since the Great Depression," said Andrea Cicione, a BNP Paribas credit strategist. "Subinvestment-grade spreads were showing things will only be as bad as the late 1980s, which now looks unrealistic, so they are catching up." Financial Times (03 Mar.)

Fitch delays review of municipal-bond ratings
Fitch Ratings said it is deferring a review of municipal-bond ratings because of challenges confronting muni-bond issuers. The turmoil in financial markets and the economic downturn are beyond anything the rating agency anticipated, Fitch said. InvestmentNews (03 Mar.)

U.S. consumer bankruptcies spike 29% over last year
The American Bankruptcy Institute forecast rising bankruptcy filings in the U.S., after 98,344 consumers filed for bankruptcy last month. That is a 29% increase over February 2008. CNBC/Reuters (03 Mar.)

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