The credit crunch at the beginning of the 1990-1991 recession is attributable to
A)banks' concern about the strength of borrowers' balance sheets.
B)the imposition of credit controls by the federal government.
C)disintermediation brought about by rising interest rates.
D)a shift by depositors from bank deposits to other investments.

Question

Quizplus · Accepted Answer

The credit crunch during the early 1990-1991 recession was primarily due to banks' concern about the strength of borrowers' balance sheets, leading to tighter lending standards and reduced credit availability.

The Credit Crunch at the Beginning of the 1990-1991 Recession