Conventional wisdom says that it is better to be a large
company than a small one when credit is tight. Bigger firms have more room for
maneuver(机动):They have access to more types of funding, they have more fat to
cut, and they have greater bargaining power with lenders. Even so, life is
getting ever more uncomfortable for the bigger beasts of the corporate
jungle. According to the Federal Reserve’s most recent lending
survey, American banks are tightening terms more aggressively for bigger firms
than for smaller ones. Lenders are more cautious than they have been at least
since 1990. The story among European banks is similar. Lenders in emerging
markets can be more suspicious of multinational firms than they are of locals.
"We just don’t know what they’ve got on their balance-sheets back home," says
one bank boss in Africa. Violent movements in exchange rates are
causing additional headaches, says Andrew Balfour of Slaughter & May, a law
firm. Calculations of financial ratios can be thrown out by wild currency
movements, potentially triggering breaches of loan agreements. Companies with
sterling-denominated credit lines may find that their facilities are not big
enough as a result of the pound’s recent sharp fall, for instance.
It is not panic stations yet. Most firms can survive for a while with the
credit tap turned off. Analysis by Moody’s, a rating agency, shows that the vast
majority of highly rated companies in America and Europe have enough headroom,
in the form of cash and undrawn bank facilities, to be able to survive for 12
months without needing new financing. European corporate-debt markets have seen
a rare flurry(惊慌) of issues in the past few days by opportunistic, highly rated
firms. Governments are also working hard to prop up credit
markets. The Fed’s program to buy commercial paper, a form of short-term company
debt, had acquired almost ＄300 billion by November 26th. Banks on both sides of
the Atlantic are issuing lots of government-backed bonds, which should encourage
lending. What kind of measures is being taken by banks along Atlantic