Social and Behavioral Sciences Commons^™

The Great Recession Of 2007-2009: Examining The Presence Of A Credit Crunch, Julius Britton Canter

Masters Culminating Experiences (1993-2011)

This study of the Great Recession of 2007-2009 and the credit crunch phenomenon suggests that there is an ongoing rationing effect on bank loans following the financial crisis of 2008. The rationing effect may lead to lower interest rates as banks switch to safer lending in order to hedge risk. However, the credit crunch may be inequitable as it primarily affects bank dependent borrowers, as well as restricting lending to new customers. An in-depth review of the current literature, empirical studies, leading economic indicators, and bank surveys are examined to reach this conclusion. We find that there are real economic …