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Researchers say credit still flowing

Paper questions 'myths' of financial crisis
Published on Oct 24, 2008

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by CareyBot

The U.S. is "indisputably" undergoing a financial crisis, but it's a myth that banks have cut back sharply on lending to businesses and individuals, or that lending between banks has dried up, according to a new paper by economists with the Federal Reserve Bank of Minneapolis.

The paper, which analyzes data through Oct. 8, also disputes claims that the cost of corporate borrowing through the issuance of commercial paper has risen sharply, or that banks play a crucial role in channeling funds from savers to borrowers.