- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 30 Sep 2019
A credit crunch (or credit squeeze or credit crisis) is an economic state characterised mainly by a sharp drop in confidence and a lack of credit (or loans). At such times, usually brought on by a shortage of funds, financial organisations are less willing to lend money which can lead to a rapid economic slowdown. At any official rate of interest, credit becomes less available than it was previously.
Credit crunches frequently occur at the tail end of a recession and can also follow periods in which lenders are overly keen, even careless, when estimating customers’ creditworthiness. When such bad debts cannot be paid, losses are suffered by lending institutions and investors. Typically, such times will see lenders and investors retreating to less risky investments such as gold, silver and other precious metals.
The opposite of a credit crunch is ‘easy credit’ (or easy money or loose credit). These conditions usually involve easy-to-get, inexpensive loans that are a result of low interest rates for borrowers and relaxed lending policies by banks.
The term 'credit crunch' in the UK has become synonymous with the period following the 2007 financial crisis which followed a collapse in the sub-prime lending marked in the USA. A number of financial institutions had to be bailed out by governments, and the resulting debt, loss of confidence and withdrawal of credit dragged economies worldwide into recession.
|Private sector housing and non-housing. Output/quarter (£millions 2005 prices) in Great Britain|
 Related articles on Designing Buildings Wiki
Featured articles and news
Robotics and the construction industry.
ECA comments on CLC's three-phase recovery plan.
Their diplomatic and architectural history.
The origins of the six volume series.
Built to defend British waters, only to serve as pirate radio stations later.
Wellbeing to influence mix of home and office based working.
An introduction to cobotics.
Survey reports on outlook for the engineering sector.
A simple path to possible error avoidance.
Construction + technology = ConTech.
New low and high tech tools enter the marketplace.
Report looks at mental health in the built environment.
Radiant wall heating method to control rising damp.
What future infrastructure provision might look like.
Highlighting the health benefits of home improvement.
Pavilions for music, entertainment, and leisure. Book review.