Post-Enron, Structured Finance Addiction Hasn't Ebbed

The asset-backed commercial paper market has indeed shrunk since the advent of Fin 46. But at $698 billion, the market is down only 4% from where it was a year ago. While a recent report from S&P blames the new accounting rule for some of the decline, it also attributes some of the slack to a lingering reticence by companies to increase capital spending.

"The impact of Fin 46 is not yet clear," S&P notes. "The data from early 2004 suggest it is having an impact, but how big an impact will require a few more months to assess."

Meanwhile, S&P expects the asset-backed commercial paper market to rebound in the second half of the year as the economy strengthens and "financing needs for working capital" increase.

As is often the case on Wall Street, predictions of doom and gloom about regulatory changes often tend to sound a bit like Chicken Little crying about the sky falling down.

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