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Recent weeks have seen credit markets--already reeling from the turmoil that began during the summer of 2007--grind to almost a complete halt. Banks have been afraid to lend to each other, let alone to companies or households, spreads over benchmark interest rates have ticked higher, and investors have decided that cash is the place to be, as they remain unwilling to deploy capital into private sector industries. While governments across the globe have acted dramatically, such as the $700 billion "rescue" plan in the U.S. and moves by the Treasury to inject capital directly into the U.S. banking system, these measures have yet to make any impact and credit markets remain virtually frozen.
