Credit Crunch Coming The next leg of the banking crisis is likely to come in the form of a credit crunch. EVEN IF no more banks fail in the near-term, the crisis has likely spooked them enough to make them a bit more careful about who they lend to. If banks aren’t lending as much, that TIGHTENS credit, meaning it’s harder for companies and individuals to get loans. This is the SAME IMPACT as when the FED “tightens” monetary policy by raising interest rates. Tighter credit weakens the economy, which will likely lead to a recession and job losses. What happens in a weaker economy when people are losing their jobs? They have a harder time paying back their loans. And who do they owe those loans to? The banks. So far banks with large treasury bond portfolios have been the ones getting hit, but those will be fine in a recession and maybe even do well if rates are falling. It’s a whole DIFFERENT set of banks… the ones with riskier lending practices… that could be in trouble in a credit crunch. Time will tell who those are, but I think banks with heavy exposure to commercial real estate could be headed for a challenging environment. #bankingcrisis #creditcrunch #fundamentalsoffinance Instantly Unlock My Free Investing Workshop, "The 9 Habits of Successful Investors" https://www.fundamentalsoffinance.com/9habitsofsuccessfulinvestorsYTO Twitter: https://twitter.com/FoFInvesting IG: https://www.instagram.com/fundamentals_of_finance/ TikTok: https://www.tiktok.com/@fundamentals_of_finance