Credit crisis may not be too strong a term for what is happening to the debt markets in the U.S. and elsewhere today. The scope of the problem is staggering. According to various reports in the financial press, worldwide debt underwriting has decreased by $2.3 trillion and the U.S. accounts for $1.3 trillion of that number as of July 2007. This decrease has resulted in a radical rolling readjustment of how both our financial institutions and our financial regulators perceive, evaluate and manage risk, and is occurring among financial entities of all sizes, from the smallest local credit union or community bank to the most sophisticated of our major banks and investment banks.

Because of the widespread and explosive growth of debt securitization, such readjustments are occurring at every level of investor participation, such as private equity funds, hedge funds, pension funds, municipal funds, mutual funds, funds of funds, etc. When you add recognized financial risks—credit, market, leverage and liquidity—to those inherent in financing brownfields—environmental and transactional—you get a perfect storm of funding unavailability. ...

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