Credit crunch

From Recessipedia

Credit crunch is slang for liquidity crisis, a period in which loans are difficult to procure because lenders increase interest rates and/or decrease the volume of loans.

Crunches occur for several reasons, including interest rate regulations like Fed Reg Q ^[1] and financial panics and other crises.

The financial panic that occurred after the failure of investment bank Lehman Brothers in September 2008 created or exacerbated ^[2] liquidity crises in several markets, including those for overnight interbank loans, subprime mortgages, and consumer credit cards.^[3]

Notes

1. ↑ Robert E. Wright and Vincenzo Quadrini, Money and Banking (Flat World Knowledge, 2009): http://www.flatworldknowledge.com/pub/1.0/money-and-banking/monetary-policy-targets-and-go/short-history-fed-blunders.
2. ↑ Jane J. Kim, "Credit Crunch Moves Beyond Mortgages: Individuals See Higher Rates, Harsher Terms on Credit Cards And Other Consumer Loans," Wall Street Journal (August 22, 2007): http://online.wsj.com/article/SB118773982869404682.html
3. ↑ Barbara Kiviat, "The Credit Crunch: Where Is It Happening?" Time (September 30, 2008): http://www.time.com/time/business/article/0,8599,1845818,00.html.