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Revision as of 16:18, 21 February 2007
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The term credit crunch has been appearing more and more often in the financial press over the past year. Put simply, it is the tightening of available credit.
Globally at the moment there is a trend in interest rate rises around the world, people may think twice about spending any available debt. Banks may become twitchy about lending to consumers if the risks of defaults increases.
Possible Implications
The credit crunch will feed through all parts of an economy, once people can no longer borrow money to spend on clothes, food, nights out. Whole industries will suffer putting many people out of work.
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