Gavekal Capital: Asset-Backed Commercial Paper Market Is 1/6 The Size It Was in 2007

Thursday, March 13, 2014

Asset-Backed Commercial Paper Market Is 1/6 The Size It Was in 2007

At the peak of the of shadow banking system in 2007 total asset-backed commercial paper (ABCP) outstanding was over $1.2 trillion (or 8.3% of GDP). Today, ABCP outstanding is about $233 billion (or 1.4% of GDP) and still declining. Issuance is down even further as it currently stands at only 10% of peak issues in 2007. One could assume that the collapse of this market has had a major impact on the velocity of money in the US economy (and perhaps globally).

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