The bank credit market doesn't get any better than this.
Randy Myers is a contributing editor at CFO.
The Fed on the High Wire
How long can the Fed raise rates without triggering a credit crunch?
In three prior Fed tightening periods — 1988, 1994, and 1999 — companies actually borrowed more, not less, than they had in the prior year, by an average annualized rate of 6 percent, according to an article published in late 2004 in AFP Exchange magazine, by a trio of Citigroup executives.
Certainly, there is precedent for easy credit conditions lasting longer than two years. The Federal Reserve's quarterly Senior Loan Officer Opinion Survey shows that during the five-and-half years from 1993 to mid-1998, for example, banks steadily loosened standards for commercial and industrial loans. Not coincidentally, that period correlated with steady and robust economic growth (see "As Low as They Can Go?" at the end of this article). — R.M.
Reader CommentsDisplaying 2 of 2
Habib Abby Habibou
Sep 29, 2006 10:38 PM ET
Investment Banker
Hi, Well done. Habibou
Sean Sloan
Sep 21, 2006 2:53 PM ET
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