My own definition of the term credit crunch (which I’ve posted before) is:
Credit crunch is when lenders do not compete with each other
Let’s get to news. Today it was announced that several banks just borrowed $2 billion from the newly opened discount window.
So the question is – if Citibank has huge capital, why it does not lend those $500 million to its clients itself? Can it lend?
Of course it can. The problem is – it doesn’t want to