Definition of Credit crisis:
The 2007–2008 credit crisis is the only severe example of such an event that has occurred within the memory of most Americans.
A sudden sharp reduction in the availability of money or credit from banks and other lenders.
A credit crisis is a breakdown of a financial system caused by a sudden and severe disruption of the normal process of cash movement that underpins any economy. A bank shortage of cash available for lending is just one in a series of cascading events that occur in a credit crisis.
An economic condition whereby lending availability is tightened due to restrictive intra-bank lending from central banks. The crisis often appears when financial institutions become highly leveraged. This will lead to higher credit requirements for borrowers.
How to use Credit crisis in a sentence?
- The credit crunch becomes a credit crisis when lending to businesses and consumers dries up, with cascading effects throughout the economy.
- In modern times, the term is exemplified by the 2007–2008 credit crisis that led to the Great Recession.
- A credit crisis is caused by a trigger event such as an unexpected and widespread default on bank loans.
Meaning of Credit crisis & Credit crisis Definition