ABCP Market Makes Comeback as Banks Seek Balance-Sheet Relief

Markets Contact us:Provide news feedback or report an error Confidential tip?Send a tip to our reporters Site feedback:Take our Survey By Alex Harris October 9, 2026 at 4:00 PM UTC Takeaways by Bloomberg AI Asset-backed commercial paper, blamed for amplifying the 2008 financial crisis, is making a comeback as banks turn to the short-term funding market to do more business with less strain on their balance sheet. Once a way for Wall Street to finance everything from mortgage lending to complex structured credit products, it has largely evolved into a tool for banks to manage balance-sheet constraints, industry watchers say, helping them meet liquidity buffer requirements and fund client positions without tying up as much of their own capital. ABCP outstanding has surged to more than half a trillion dollars, according to the latest data from the Federal Reserve. While that’s still less than half its pre-crisis peak, it’s twice the size it was just five years ago.