The sub-prime woes plaguing Wall Street firms is undoubtedly likely to continue. Citibank is expected to report approximately $11-12B in write-downs. Taking a quick sample of what has happened to the stock prices of companies such as Washington Mutual and Citigroup, it is without a doubt the case that those firms with large amounts of commercial paper on their books are keeping a close eye on the market.

The increasing difficulty with which commercial paper can be re-traded, coupled with the fallout in the residential market is unlikely to lead very many lender’s to relax the tightened standards anytime soon. While defaults in the commercial sector have remained relatively static, the fear alone of what might lurk around the corner is enough to keep lenders in their current state of hibernation.

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