The Short View: Credit fears resurface [[LEH=BSC]]

By Jamie Chisholm
Wednesday Jun 25 2008 13:25

Fears are mounting that conditions are set to deteriorate markedly in credit markets.

Lehman Brothers (NYSE:LEH) warned this week that spreads on credit default swaps, which track the cost of insuring corporate debt against default, could soon spike beyond the levels seen at the time of the Bear Stearns (NYSE:BSC) rescue in March.

Spreads tightened a touch on Wednesday as the market hoped the £4.5bn ($8.9bn) secured by Barclays augured well for raising capital in the banking sector. However, the trend since mid-May has been disturbing.

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Technorati Tags: Augured, Banking Sector, Barclays, Bear Stearns, Chisholm, Corporate Debt, Credit Default Swaps, Credit Markets, Fears, Lehman Brothers, Nyse, Spike, Trend