This week the Fed took another step in that direction: by buying commercial paper, it is now in effect lending direct to companies.

ECONOMIST: The credit crunch

Ideally, commercial banks need to get into the business of long-term lending to companies.

ECONOMIST: Brazil's development bank

Earlier Tuesday, investors appeared encouraged after the Federal Reserve's said it would buy massive amounts of commercial paper in order to kick-start lending in the markets where many companies turn for short-term loans.

FORBES: Magazine Article

Analysts said Friday that deals are likely, especially as regulatory scrutiny over lending standards forces stand-alone mortgage companies to find deeper pockets of capital and as commercial banks bow out of the business.

FORBES: Magazine Article