It looks like we'll see just how much the powers that be (in DC) want banks to lend. The trade off is simple- you want corporate lending to go on, you're going to have to accept CDS as a fact of life. Some of the usual suspects (JPM, BAC, and C among others) have been busy throwing mud in the eye of every Mad Max and Michael Capuano disciple by linking corporate credit lines to short term interest rates as well as CDS. So as regulators continue to struggle with the idea that those who hold the money hold the leverage, corporate borrowers such as UPS are learning what happens when you poke the bear.
"It wasn't our idea," says a UPS spokesman. "The banks pulled back from offering set rates."
Who knew Maxie would help save the CDS market and spur innovation?