Credit Crisis
Think back to 2008. Following the collapse of Lehman Brothers, we witnessed a remarkable paralysis in the global credit markets. The day-to-day lending (short-term lending required to meet daily cash needs) came to a halt. We experienced a scenario where short-term lending stalled, as companies began to halt lending to businesses and consumers. Companies typically rely on short-term loans while they wait for consumers to pay for products.
The credit crisis had a catalyst: a wave of defaults by borrowers. In this case, mortgage holders and counterparties for default swaps who struggled to meet their obligations.
With capital not coming into banks, the institutions tighten their lending capabilities and engage in a “flight to quality,” only selecting borrowers that have extremely low default risks. The tightness in loan issuance also drives up the cost of borrowing for even the most creditworthy companies as they compete for available credit.
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Finance: What is the Equal Credit Opport...6 Views
Finance a la shmoop what is the Equal Credit Opportunity Act? alright people while the
federal government thinks everyone should have the equal opportunity to get [Men in Federal Government appear]
into debt isn't that sweet of them you know that Uncle Sam well he sure does
have a heart of gold this federal law makes it illegal to discriminate against
people who are applying for financing on pretty much anything legal based on
their age gender marital status religious affiliation ethnic or national
background or public assistance benefits your credit score however well that
still matters sorry just keeping it real
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