Credit market

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The credit market includes all OTC and exchange markets in a nation or region that trade corporate- and government-issued debt - longer-term in the bond market and shorter-term in the money market. The credit market has lately taken a beating as the credit crisis has frozen credit markets like mortgage-backed securities and driven up rates in others like commercial paper.

Credit markets typically consist of two sub-markets: the primary market, where government and corporations sell their debt securities (bonds, etc.) to lending investors, and the secondary market, where these securities are sold to other investors.[1] The vast majority of credit-market trading is conducted on over the counter markets via electronic trading on the secondary market.

Latest news[edit]

Some of the credit market's more obscure debt instruments like auction-rate securities issued to the OTC money market began drawing attention early in 2008[2] as markets in them began to freeze similarly to the mortgage backed securities market of 2007. One prominent victim of newly risk-averse credit markets has been the auto industry, whose finance arms have seen their market for collateralized debt seize up recently, restricting their ability to lend to potential customers.[3]