Thursday, 16 October 2008

Credit Crunch

What does Credit crunch mean?
Credit crunch is a sudden reduction in the general availability of
loans (or credit), or a sudden increase in the cost of obtaining loans
from banks. (wikipedia)
The events that led to the credit crunch took place in 2007. The main
reason for the credit crunch is the collapse of housing market.
Also known as a`house bubble`. Firstly, house prices in the USA were
really high. It was profitable for banks because when people borrow money
from banks and can not give it back banks could sell their houses.
Too many houses were built and prices went down. So banks
couldn't cover their losses and that affected financial market and the
whole economy.

4 comments:

chris sivewright said...

"Too many houses were built and prices went down"

if there are too many houses and also there are homeless people, is this a sign of market failure?

chris sivewright said...

Two days with no blog is not good - you must help yourself!

No-one can MAKE your English improve if you do not try - and if your English does not improve you will not pass any A levels at all.

Your choice.

Rinat said...

Sorry i will write but i will pass my a level exam

chris sivewright said...

Rinat

Your sentence makes no sense.