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Credit Crunch
A credit crunch is an economic condition where investment capital is difficult to obtain. Banks and investors become wary of lending funds to corporations, thereby driving up the price of debt products for borrowers.
Credit crunches are usually considered to be an extension of recessions. A credit crunch makes it nearly impossible for companies to borrow because lenders are scared of bankruptcies or defaults, which results in higher rates. This results in a prolonged recession or slower recovery, which occurs as a result of the shrinking credit supply.
Below are a few items of news relating to the credit crunch which you may find useful.
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