U.S. commercial paper market shrinks 4th week-Fed
NEW YORK, Oct 9 (Reuters) - The U.S. commercial paper market contracted for a fourth consecutive week, as many companies have struggled to raise funds during the global financial crisis, according to Federal Reserve data released on Thursday.
For the week ended Wednesday, the size of the U.S. commercial paper market, a critical source for many companies to fund their day-to-day operations, fell $56.4 billion to $1.551 trillion, from $1.607 trillion the previous week, Fed said.
That brings the cumulative shrinkage of this market to $264 billion over a four-week plan, including the previous week's $94.9 billion plunge.
Analysts say that the commercial paper market, along with most other conduits of short-term borrowing for banks and companies, has effectively seized up in recent weeks.
Banks' distrust of lending to each other has pretty much stopped up interbank lending markets, with many hoarding cash for fear that some short-term loans might not get repaid. A similar dynamic is roiling the commercial paper market, analysts say. (Reporting by Richard Leong and Chris Reese; Editing by Tom Hals)
