credit crunch

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credit crunch

A family discusses their budget at the kitchen table during a credit crunch.

Definition
  1. Noun:
    • A period of economic difficulty characterized by a sharp reduction in the availability of loans or credit from banks and other lenders, often accompanied by high interest rates. It describes a situation where it becomes much harder and more expensive for businesses and consumers to borrow money.
Usage
  • The term "credit crunch" is used to describe a specific economic condition, typically during or preceding a recession. It is often discussed in financial news, economic reports, and policy debates.
  • It functions as a countable noun (e.g., , ).
Examples
  • Noun:
    • The 2008 financial crisis was triggered by a severe credit crunch in the housing market.
    • Small businesses are struggling to survive during the current credit crunch.
    • Economists warn that rising interest rates could lead to a credit crunch.
Advanced Usage
  • "to trigger/spark a credit crunch": to cause a credit crunch to begin.
    • The collapse of the major bank threatened to trigger a credit crunch.
  • "to be in the midst of a credit crunch": to be experiencing a credit crunch.
    • The economy is in the midst of a credit crunch, making it difficult to get a mortgage.
  • "to ease/alleviate a credit crunch": to take measures to make a credit crunch less severe.
    • The central bank intervened to ease the credit crunch.
Variants and Related Words
  • Credit squeeze (n): A less severe or more general term for a period of tight credit conditions. Often used interchangeably with "credit crunch," though it may imply a milder situation.
    • The central bank's policies resulted in a credit squeeze.
  • Liquidity crisis (n): A situation where there is a shortage of cash or easily sellable assets in the financial system. A liquidity crisis can cause or be part of a credit crunch.
    • The bank faced a liquidity crisis during the panic.
Synonyms
  • Credit squeeze: A period of restricted credit availability.
  • Liquidity crunch/crisis: A shortage of available money in the financial system.
Related Phrases
  • Tight credit conditions: A general phrase describing an environment where loans are difficult to obtain.
    • Banks are operating under tight credit conditions.
  • Freeze in lending: A situation where banks almost completely stop issuing new loans.
    • The crisis caused a near-total freeze in lending.
credit crunch

A family discusses their budget at the kitchen table during a credit crunch.

Noun
  1. a state in which there is a short supply of cash to lend to businesses and consumers and interest rates are high

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