Sweeney’s Blog Loan, Mortgage And Medical Information

Definition of Credit Crunch

Credit Crunch is the strong credit expansion that occurs after the major economic dimensions.
The credit crunch is usually at the end of the expansion phase, when central banks raise interest rates to cool growth and avoid the risk inflation by pushing lenders to raise their interest rates and closing l ' access to credit for those who cannot afford the expense. In other cases it may happen that, on the wave of bank failures and withdrawal of liquidity, banks apply a closure of the claim themselves to avoid bankruptcy.

A more current definition, however, is given by Sole24Ore:

Credit crunch Credit crunch
Contraction of credit. Economic climate in which it is difficult to raise investment capital from banks or investors because of their distrust in market. Lack of funding raises the cost of credit to makes it difficult for companies to access them. Rationing reduces or blocks the activity of M & A and in the long run has an impact on the investment.
As you have understood "credit crunch" literally means contraction of credit, but it is to adapt the scope of use.
In this case, for example, distrust of the market is blocking the supply of credit from investors, creating the various economic problems that we are aware.

In this position could be added a further credit is due to close rates by banks, a move that could preserve the them at the expense of the system.
We will see continue to evolve as the economy.