He added, "Economic uncertainty is forcing borrowers into behavior that is radically different from their behavior in similar interest rate environments of the past."

The values of neighboring houses are pushed down, forcing other borrowers deeper under water"."

Many lenders charge more for these "nonconforming" long-term loans or do not offer them at all, forcing borrowers to sign up for adjustables or the 15-year fixed-rate loans.

As West Germany seeks to finance the redevelopment of East Germany, so the argument goes, borrowers there will bid up interest rates to attract capital, forcing borrowers in the United States and Japan to raise their rates in a global competition for funds.

Analysts, economists and even some politicians say the banks have not made enough progress in dealing with bad loans or forcing troubled borrowers to restructure.

What is more, it would make investors think twice about lending to all other municipalities and could force municipal borrowers to pay more to entice investors to lend to them.

But in a slowing economy, investors are reluctant to buy such below-investment-grade debt, forcing borrowers to offer yields so high that many takeovers do not make sense.

A recent Federal Reserve study shows that black Americans are three times as likely as whites to be signed up for high-cost "subprime" mortgages that often force borrowers into default.

Japanese banks set extremely tough conditions for loans, forcing borrowers to use relatives and friends as guarantors who become liable for the defaulted loans, producing extreme guilt and despair in the borrower.