The phrase "credit rationing" is correct and can be used in written English.
It refers to the practice of limiting or restricting the amount of credit that a person or business can access. An example of using "credit rationing" in a sentence could be: "The current economic crisis has led to a rise in credit rationing, making it increasingly difficult for small businesses to obtain loans from banks."
However, regressions controlling for a host of firm characteristics show that the worsening in general credit conditions has been more pronounced for non-innovative firms with the exception of absolute credit rationing which still remains more severe for innovative firms.
Some countries have tried using various tools of credit rationing rather than relying on traditional measures such as open market operations.
And institutional problems, such as the troubles of the banking system, may also lead to some credit rationing that deters investment.
In the formal credit sector, the lowest income group faces more credit rationing than other groups, despite the fact that microcredit programs are designed to target households at the bottom of the income pyramid.
Depositors are skittish and banks are having to offer them higher rates.Higher funding costs have pushed up lending rates, but the main way that the banks' difficulties are affecting the economy is through credit rationing.
"If the sovereign-debt crisis were to rebound massively, with a broad surge in risk premia and spillovers across countries, severe credit rationing and a collapse of domestic demand could ensue," the report said.
In recent decades analysis of the roles and functions of banking, (including such topics as credit rationing, systemic bank panics and regulation), have been re-integrated into mainstream economic theory.
They argue that the combination of anecdotal evidence of reduced lending and the extensive use of the central bank's own deposit facility — rather than lending the money out — suggests that credit rationing is well under way.
"The macroeconomic models available at the time of the crisis typically ignored the banking system and failed to allow for the possibility that bank capital shortages and credit rationing might impact on macroeconomic developments," it said.
"In the past, when money was tight, like it has gotten now, it caused credit rationing," where banks, with plenty of Government guidance, decreed which companies would obtain capital, said Mr. Suzuki.
