Credit crunch
Economic Issue
Geithner: 'Credit crunch not over'...Biz Books Innovators Owner Tested Tech Edge Best Bosses Next Little Thing Startup Showdown Current Issue Archive Geithner: 'The credit crunch is not over' Small businesses took center stage as Washington power players convened to tackle... In this article: Tim Geithner, Small business, Credit crunch, Mark Warner, Huntington Bank, and Washington |
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Reuters | 2 days ago
Draft UK bank law confirms tougher watchdog powers
...and enforce pledges Britain and other members of the G20 group of leading countries made this year to apply lessons from the credit crunch. "The bill we are introducing today is central to the government's reform agenda that seeks...
In this article: Britain, Paul Myners, Bank of England, Conservative Party, Corporate governance, Financial Services Authority, London Evening Standard, and CMS Cameron Mckenna
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L.A. Times - Personal Finance | 2 days ago
Wells Fargo to buy back bonds to settle fraud lawsuit by California
The bank agrees to reimburse investors who bought $1.4 billion in auction-rate securities that were frozen in the credit crunch early last year, including $700 million held by California residents. In addition to buying back auction-rate...
In this article: Wells Fargo, California, San Francisco, Andrew Cuomo, and New York
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washingtonpost.com | 3 days ago
Wells Fargo to repay $1.3 billion in auction-rate pact
...are long-term debt instruments whose interest rates are regularly reset through auctions. The market froze in February 2008 as the credit crunch took hold, trapping investors and issuers and prompting complaints from investors around the...
In this article: Wells Fargo, California, NEW YORK, Edmund Brown, San Francisco, Allegation, TD Ameritrade, and U.S. Securities and Exchange Commission
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Daily Mail | 3 days ago
HSBC: Reforms could create a new credit crunch
...bank has warned that forcing through draconian regulatory reforms on the financial sector - including a crackdown on bonuses - could cause 'a new credit crunch'. HSBC chairman Stephen Green said: 'There is once again a real danger that the...
In this article: Stephen Green, HSBC, Abbey, Bank of England, Business Week, Santander, and Britain
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Revealed: The picture that shows even the rich have suffered in the credit crunch
Last updated at 1:11 PM on 17th November 2009 This incredible photograph illustrates the full extent to which the credit crunch has hit even the super rich. Pawnbroker Paul Aitken poses with six Rolex watches, two Ferraris, a Porsche -...
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Migration and credit crunch fuel primary school places crisis
School places crisis as migration and credit crunch leads to shortage for tens of thousands of children Last updated at 5:53 PM on 11th November 2009 Tens of thousands of young children face being turned away from their local primary...
In this article: Recession, Birmingham, and London
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Independent.co.uk - Business | November 09, 2009
Jury ponders fate of Bear Stearns duo in first credit crunch trial
Managers accused of fraud over collapse of hedge funds that heralded meltdown Prosecutors were last night awaiting the outcome of their efforts in a Brooklyn courtroom to win the conviction of two former hedge fund managers at Bear Stearns...
In this article: Bear Stearns, American International Group, Defendant, Insider trading, Financial crisis, and Lehman Brothers Holdings
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Description from Wikipedia:
A credit crunch (also known as a credit squeeze, finance crunch or credit crisis) is a reduction in the general availability of loans (or credit) or a sudden tightening of the conditions required to obtain a loan from the banks. A credit crunch generally involves a reduction in the availability of credit independent of a rise in official interest rates. In such situations, the relationship between credit availability and interest rates has implicitly changed, such that either credit becomes less available at any given official interest rate, or there ceases to be a clear relationship between interest rates and credit availability (i.e. credit rationing occurs). Many times, a credit crunch is accompanied by a flight to quality by lenders and investors, as they seek less risky investments (often at the expense of small to medium size enterprises). ==Background and causes==
There are a number of reasons why banks may suddenly stop or slow lending activity. This may be due to an anticipated decline in the value of the collateral used by the banks to secure the loans; an exogenous change in monetary conditions (for example, where the central bank suddenly and unexpectedly raises reserve requirements or imposes new regulatory constraints on lending); the central government imposing direct credit controls on the banking system; or even an increased perception of risk regarding the solvency of other banks within the banking system.
Often it is only in retrospect that participants in an economic bubble realize that the point of collapse was obvious. In this respect, economic bubbles can have dynamic characteristics not unlike Ponzi schemes or Pyramid schemes.
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