Furthermore, banks were allowed to fail, causing a credit crisis.
When the Russians plunged into financial crisis in August 1998, causing a credit squeeze similar in many respects to the one today, Mr. Greenspan was initially reluctant to cut interest rates.
What's going on now, however, is beyond that: the "financial accelerator," with deleveraging causing a credit crunch that forces further deleveraging, and now threatens to produce a sort of pancake collapse of the whole system, was not, I think, so widely foreseen.
This seems to be working but may cause a credit crunch among firms and banks, pushing GDP growth below the present 4-5% rate.
The group has released studies contending, among other things, that compelling banks to reduce their use of leverage — a move that would almost certainly reduce banks' profits — would cause a credit crunch.
And there can be wider economic effects: as the surviving banks try to raise cash by calling in loans, there can be a vicious circle in which bank runs cause a credit crunch, which leads to more business failures, which leads to more financial troubles at banks, and so on.
And international financial turmoil has caused a credit squeeze at home.Mr Zapatero points out that so far Spain has fared no worse than several other large European economies, and that the country's financial system is stronger than that of many of its counterparts: to date, no Spanish bank has got into difficulties.
At the end of 2007, global financial markets froze up and the loss of capital inflows to Kazakhstani banks caused a credit crunch.
That financial meltdown caused a credit crunch that triggered a severe recession and, in countries such as Greece, a sovereign debt crisis.
Rose wrote, "It's pretty clear that Apple's doing its best to guard your wallet with this implementation -- anything that might cause a credit card charge via an unfamiliar iOS device is going to force you to authenticate.
Jon Sterling, a regional sales manager for real estate offices in Northern California, says, "An inquiry itself causes a credit score to temporarily drop, and acquiring more debt by buying something, or the capacity to acquire more debt by opening a new credit account, can have dramatic effects on [your] mortgage situation".
