Why this is an entirely new kind of credit crunch

Banks have made fat profits from securitising and syndicating debt, but recent market turmoil has exposed the dangers of this process. Laying hands on cheap money is about to get much harder.

"Say hello to a world without cheap money," says John Waples in The Sunday Times. For the past five years, big business has been "hijacked by a crowd of smart financiers" using easy debt to buy and sell companies "at their whim". But the world's big banks, which have made billions fuelling the boom, are now bringing down the curtain.

In recent years, banks have been making fat profits from securitising and syndicating debt essentially making loans then selling them on to other investors. But the turmoil in the markets has left the banks on the hook for an estimated $8bn after investors showed little interest in buying the loans used to back several large leveraged buyouts. And this figure may be only the tip of the iceberg according to bankers there is around $200bn in debt in the US that banks have agreed to lend but have yet to syndicate, while Europe accounts for a further e40bn.

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