The more selective approach to lending primarily concerns medium-sized and large firms and finance for mergers and acquisitions. The banks reported that they were also being more cautious in granting lines of credit to new customers. The fall in the prices of shares in high-tech. sectors has dried up a major source of fee income for intermediaries.
The economic slowdown has also had repercussions on the bond market. The risk premium for bonds issued by firms with a high credit rating widened by about one percentage point in 2000 to 1.3 points; that for bonds with a low rating nearly doubled to 4.3 points. The premiums have narrowed following the reduction in official rates in January.