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    • Join Date: Jun 2008
    • Posts: 42

    financial crisis

    Dear all,

    Does anyone tell the different between financial crisis and credit crunch?

    Thanks in advance

    • Join Date: Jun 2009
    • Posts: 1

    Re: financial crisis

    Financial market is a part of the Market Economy.
    Credit market is a part of the Financial market.
    Financial crisis is a problem of the financial market and credit crunch is a problem of the credit market.
    Basically the credit crunch consist in the incapacity of the credit market to suply the economy with the requested quantity of money (credit).
    The financial crisis is a more complex problem than credit crunch but can include the last one. Since financial market is composed by other sectors than credit market (like bond market, shares market, forward market, options market and even estate market in some visions) a financial crises can be caused by problem in the other sectors than credit.
    If you have a credit crunch you automatically have a financial crisis but if you have a financial crisis it is possible to not have a credit crunch instead to have just a stock market crush.
    I hope is useful.

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