Naturally, funds that originated ABCP and used it to raise money found themselves in fund-raising difficulties: Funds under the Bear Stearns umbrella went bankrupt; BNP Paribas moved to freeze its affiliated fund’s new applications and redemptions. The structured investment vehicles (SIV) created by banks to issue ABCP were unable to find funding sources, and then these banks were forced to provide liquidity enhancement instead.
*  *  *  As I settled down to write this, it struck me that what I had described as “stressful and extraordinary times” in my previous Statement seem set to last for quite some time. The global economy has become even more unpredictable and much of the traditional thinking is being put to the test as longheld paradigms are thrown overboard.