Occurrence of a credit crunch
March 20, 2009 – 7:31 amGenerally credit crunch happens when there is a shortage of funds obtainable in the credit market, making it very complicated for borrowers to get financing. This occurs when the lenders have limited resources accessible to lend or are indisposing to lend extra funds, or have increased the price of borrowing to a rate that is not affordable to most of the borrowers. Credit crunches also may happen when authoritarian bodies raise capital requirements for the financial organizations. Banks and other lenders are necessitates to sustain a net amount of capital liquidity based on their risk measured level of assets. If this condition increases, then banks require increasing capital. To meet the terms, literally banks will cut lending, decreasing the accessibility of loans for individuals and as well as for companies.
3 Responses to “Occurrence of a credit crunch”
nice attempt dear carry on
By bukan on Mar 20, 2009
Nice expl
By samik on Mar 25, 2009
Good stuff! Enjoyed the video and reading. I learned a few things as to what this crunch is about.
By stephen c on Mar 25, 2009