the.com/credit crunch
When banks suddenly remember that risk exists and stop pretending otherwise.
means A sudden shortage of available credit, when lenders tighten standards and pull back on loans all at once, often triggering a broader economic slowdown.
from A straightforward compound: 'credit' from Latin creditum, 'something entrusted or loaned,' and 'crunch,' an imitative word for a crushing, grinding sound that by the 20th century had come to mean a tight, pressured squeeze — as in a 'budget crunch.' The phrase 'credit crunch' surfaced in financial English in the latter half of the 20th century and became a household term during the 2007–2008 financial crisis, when the crushing sound turned out to be the whole banking system seizing up.
- origin
- 2008 term for lending suddenly drying up globally
- root cause
- banks stopped trusting each other's balance sheets
- irony
- caused by too much cheap credit beforehand
- real effect
- good businesses starve alongside reckless ones