ch on the larger economy and strategies for ways that such a crunch can be avoided in the future.
The term "credit crunch" refers to the situation in which credit is difficult to obtain because lenders are reluctant to make new loans for fear of bankruptcies or other types of default on the part of borrowers. A credit crunch often occurs with regard to corporate borrowers during recessionary times; if companies are successful in obtaining credit during these times, they are likely to pay higher interest rates to account for the perceived higher risk on the part of the creditor. The result is that it takes longer to recover from the recession ("Credit Crunch" n.p.).
The current credit crunch in the United States has many different causes, but one of the most often cited is the practice of lenders marketing home mortgages and home equity-backed credit to consumers who previously would not have qualified for such credit. These "sub-prime" loans gave many individuals the opportu
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