Credit crunch, credit stringency

Condition in which – an individual company or – the economy as a whole is provided with loans by banks – only very hesitantly (quite hesitant) or – not at all (a general economic situation in which loans are harder to obtain). – As experience teaches, banks become more cautious in granting loans in cyclical decline stages, especially to vulnerable sectors, and tighten their conditions because the default risks for the institutions also increase. – To solve a credit crunch, the central bank could, if necessary, purchase securities (such as commercial paper) from private companies: a path taken by the U.S. central bank and the Bank of England in the course of the financial crisis that followed the subprime crisis. Of course, this would only benefit the larger companies. The large number of small and medium-sized companies are financed primarily by bank loans. – See bank-based lending, dotcom bubble, three-year tenders, insolvency cases, credit-restriction carousel,
Credit substitute, credit mediator, quantitative easing, stealth policy, loss-on-loan relationship, full allotment. – Cf. Deutsche Bundesbank Monthly Report of September 2009, pp. 22 ff. (credit crunch hardly detectable in the wake of the financial crisis; p. 25: econometric estimating equation), ECB Annual Report 2009, pp. 39 ff. (explaining banks’ reluctance to lend; overviews). ECB Monthly Bulletin of March 2010, pp. 46 ff. (detailed presentation with regard to SMEs and the year 2009), Deutsche Bundesbank Monthly Bulletin of May 2010, pp. 42 f. (effects of the financial crisis on companies, households and the government), ECB Monthly Bulletin of August 2010, pp. 29 f. (banks’ reports on their lending behavior), Deutsche Bundesbank Monthly Bulletin of October 2010, pp. 40 ff. (German banks’ lending conditions in the light of the financial crisis; overviews), ECB Monthly Report of November 2010, pp. 39 ff. (SMEs’ access to credit according to a special survey; overviews), ECB Monthly Report of February 2012, p. 35 (Deutsche Bundesbank’s special survey; results in overview), ECB Monthly Report of May 2011, pp. 41 ff. (SMEs’ access to finance since
2009; overviews), ECB Monthly Bulletin of December 2011, pp. 59 ff. (detailed presentation of developments since 2009; overviews; survey results), Deutsche Bundesbank Monthly Bulletin of January 2012, p. 15 (in note 10, [linguistically unpalatable] definition of credit crunch), ECB Monthly Report of April 2012, pp. 22 ff. (factors influencing lending to households since 1999; overviews), Financial Stability Report 2012, p. 32 (bank lending remained stable during the financial crisis), ECB Monthly Report of May 2013, pp. 44 et seq. (detailed statistics relating to SMEs), ECB Monthly Bulletin of July 2013, p. 44 et seq. (financing conditions of SMEs; many overviews), ECB Monthly Bulletin of November 2013, p. 49 et seq. (SMEs’ access to loans in particular; overviews), Deutsche Bundesbank Monthly Report of May 2014, p. 41 ff. (SMEs’ financing conditions in the euro area; overviews), ECB Monthly Report of July 2014, p. 87 ff. (Basic information on SMEs’ access to loans; overviews; references).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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