Credit Crunch What does it mean?

A ‘credit crunch’ is a financial crisis in which banks refuse to issue credit, i.e. lend any money, to other banks. Where they will lend, for example on mortgages or credit cards, they raise interest rates; this makes it expensive to borrow money, which slows economic growth. The term is often used to refer to the global economic downturn that started in 2007, though the tightening of credit itself was only part (albeit a crucial part) of the wider economic catastrophe.