The Impact of Subscription Lines on LPS

Market melt downs and financial crises can increase the probability that banks will recall lines. If an l p has taken advantage of subscription line financing to become more than 100 % committed, it might be more likely to default on the calls. The key to financial security doesn't lie in counting on things to work in good times or on average. Rather, it consists of figuring out what can go wrong in bad times, and of only doing things that will prove survivable even if they materialize.