credit crunch investment & finance definition
A
reduction in the supply of credit that occurs when lenders become reluctant to
lend funds and tighten their borrowing requirements. A credit crunch typically
drives up interest rates and is often associated with a tightening monetary
policy.
See credit crunch in Wall Street Words
A period during which borrowed funds are difficult to obtain and, even if funds can be found, interest rates are very high. Credit crunches were particularly severe before 1980 when the ceilings on interest rates that financial institutions could pay resulted in a drying up of deposits.
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