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Buzzword: Commercial paper

Marketplace Staff Sep 14, 2007
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Buzzword: Commercial paper

Marketplace Staff Sep 14, 2007
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Unfolding credit brings us this week’s Marketplace Money buzzword: Commercial paper.

That’s the name for the short-term loans which big corporations lend to other big corporations. They’re cheaper than bank loans, which makes them a good way to get a quick sheaf of cash. But the subprime crisis shredded the commercial paper biz. Issuers feared they wouldn’t get paid back for their paper, so they issued less of it.

According to a new report, though, corporations are starting to lend again, leading some to think the credit crunch is easing up. Maybe it’s possible to dig the economy out of the trash.

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