Feeling A Credit Squeeze

Banks are tightening up--and they'll only get tougher. That could turn the soft landing into a thud

A year ago, companies were practically fighting off the lenders waving cash at them. But all that has changed since the spring. First, the initial public offering market dried up, making it hard for companies to raise cash by issuing equities. Then the junk-bond market took a hit. Now, banks are cutting back on syndicated lending--big loans that are parceled into chunks and sold off to other banks and investors such as insurance companies. Just $23 billion of these loans were made in the first three weeks of November, vs. $62 billion in the same period in 1998.

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