Sep. 10, 2007 (LPAC) British bankers are warning of the "worst crisis in 20 years" which will come "to a head" this week in London, the Sunday Times reported Sept. 9. The crisis will hit with the $113 billion (£57 billion) of asset-backed commercial paper (ABC Paper, short term debt backed by mortgages and other debt instruments) which come up for refinancing this week, mostly through London. This is more than the $100 billion which came due in mid-August. The Sunday Times quoted a senior executive of one of Britain's top five retail banks saying: "These are the worst conditions I have seen in money markets for 20 years." The refinancing of the commercial paper will start today, and go on through Sept. 20, and the "City is braced for huge market volatility."

On Sept. 5, the Bank of England and the Financial Services Authority called a meeting with Britain's top banks on the depth of the liquidity freeze.

The $113 billion is "the hangover from the crisis in credit markets that began with American [Greenspanian -ed.] sub-prime mortgages," the Sunday Times wrote. Paul Mortimer-Lee, global head of market economics at BNP Paribas in London, is quoted saying that "Asset-backed commercial paper is rolling off every day and the banks are taking more and more onto their balance sheets, which is using up capital. It is both a liquidity and a capital crisis." Even "solid" banks are hoarding liquidity, since they face some $380 billion of loans and bonds from private-equity deals to deal with.