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Loose credit |
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Loose credit Policy by the Federal Reserve Board to make loans less expensive and more available by reducing interest rates through market operations. Loose credit. In order to combat a sluggish economy, the Federal Reserve's Open Market Committee (FOMC) may institute a loose credit policy. In that case, the Federal Reserve Bank of New York buys large quantities of Treasury securities in the open market, which gives banks additional money to lend at lower interest rates. This abundance, or looseness, of credit is intended to stimulate borrowing and invigorate the economy. Tight money is the opposite of loose credit. It's the result of the Fed's decision to sell securities in the open market, which reduces bank reserves and makes borrowing more expensive. A tight money policy is designed to slow down a rapidly accelerating economy. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| Foreclosure activity in California is expected to rise next year from record-low levels as home sales soften, price increases moderate and homeowners cope with debt amassed through loose credit, analysts said Monday. Over the past several years--thanks in large measure to the Federal Reserve's loose credit policies--the housing market has undergone a spectacular boom as millions of Americans have become first-time homebuyers. Given the abundance of capital still available, and the current loose credit environment, Fitch believes the packaging sector remains a likely hunting ground for buyouts or other private investors looking to take ownership stakes. |
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