As for the environment for corporate financing, firms’ cash inflow has improved, reducing demand for external funds and narrowing the issuing spreads even on debt securities issued by firms with low credit ratings.
It is difficult to say which came first or – in other words – whether these new risk measurement techniques were the egg and the increased credit trade the hen or vice versa. Technological progress has continued up to the present day. The interaction of market and credit risk is being taken into account by more and more sophisticated models.