"What is a credit crunch and what do they mingy when they speak the "credit markets"? Answers: A credit crunch occurs when borrowers find that credit

Answers:
A credit crunch occurs when borrowers find that credit becomes relatively out of commission at a reasonable rate of interest. Typically, people are trying to expand their lifestyle, or businesses are trying to expand the flexibility of their business, but can't get the credit necessary to expand. At like time, banks and other lenders are loaned out: they are unwilling to borrow more money from the Federal Reserve (at high rates) contained by order to lend it out at even higher rates. Such bank fear the lack of debtors at such high-ranking rates. There is always an element of associates desperate enough to take on debt at any rate, no concern how high. During a credit crunch, loan funds are so scarce that they are rationed.

The credit market is simply the buyers (debtors) and sellers (banks and other lenders) of money. The price is the interest rate, or the discount rate if no interest is paid, and approaching other markets, the buyers and sellers adjust the price - here, the interest or discount rate - through supply and emergency. Sometimes these markets are formal and regulated trading sites. In such cases, various standard contracts (bonds, mortgages and commercial paper) are traded close to commodities. Less formal - yet highly regulated - market exist for other credit, such as a personal loan or auto loan. In such markets, lenders announce their price in the form of an interest rate, and adjust this rate base on how many people come through their doors hopeful to sign a loan agreement at that interest rate.