What factors would contribute to the continue don

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What factors would contribute to the continue don of the boom in commercial paper? What factors would cause a contraction in the commercial paper market?

The difficult economic and credit environment in the post- September 11 era, combined with historically low interest rates and a deep desire by corporate issuers to reduce exposure to refinancing risk, had a depressing effect on commercial paper volumes from 2001 through 2003. According to the Federal Reserve, U.S. nonfinancial commercial paper for example, declined 68 percent over the 3-year period, from $315.8 billion outstanding at the beginning of 2001 to $101.4 billion by December 2003. In addition to lower volume, credit quality of commercial paper declined over the same period, with the ratio of downgrades outpacing upgrades 17 to tin 2002.

Reference no: EM131132061

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