Money Saving Index

What is 'Credit Crunch'

The Oxford Dictionary defines the credit crunch as

'a severe shortage of money or credit'

The term was coined in 1967 by the American Federal Bank, is currently used to define the situation the banks are in right now, where the inter-bank lending has virtually dried up or when it is available it is 30-40% more expensive now for banks to borrow from other banks as it was 2 years ago.

Credit crunch is now used in headlines across the tabloids to discribe:

Job Losses
The housing price slump
Current Inflation
Difficulty in getting a mortgage

It wont be long before we use the credit crunch as an excuse for everything else. Does anyone have any thoughts??? let me know

Comments




  • I think its a bit of an over hype, I agree its having an affect on banks, but is it as bad as they all make out
    CreditGuru, 2 years ago | Flag

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