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A situation in which it is difficult to finance through borrowing. A credit squeeze often occurs when economic growth is declining and/or when interest rates rise. The Federal Reserve is often blamed for credit squeezes when they raise target interest rates, but it may occur through private sector actions as well, such as a systemic rise in bad debt. See also: Credit crunch.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
Restricted bank lending that is accompanied by rising short-term interest rates and a decline in economic growth. Credit squeezes are generally attributed to policy actions of the Federal Reserve.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
credit squeezean attempt by the monetary authorities to reduce the amount of CREDIT granted by financial institutions to consumers and businesses, in order to reduce the level of spending in the economy. A credit squeeze forces up INTEREST RATES, affecting businesses by reducing consumer demand and raising the cost of financing stockholding and investment. See MONETARY POLICY.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
credit squeezeany action taken by the monetary authorities to reduce the amount of CREDIT granted by COMMERCIAL BANKS, FINANCE HOUSES, etc. Such action forms part of the government's MONETARY POLICY directed towards reducing AGGREGATE DEMAND by making less credit available and forcing up INTEREST RATES.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005