Between the summer of 2007 and the spring of 2009, the U.S. economy was gripped by an acute liquidity and credit crunch, by all accounts, the most severe financial crisis since the Great Depression. Throughout this period of extreme financial turmoil, credit spreads the difference in yields between various private debt instruments and government securities of comparable maturity served as a crucial gauge of the degree of strains in the financial system. In addition, movements in credit spreads were thought to contain important signals regarding the evolution of the real economy and risks to the economic outlook, a view supported by the insights from the large literature on the predictive content of credit spreads or asset prices more generally for economic activity.
The aim of this PDF Ebooks is to provide helpful information to constituents who visit their MP or local Councillor looking for guidance on financial services issues.
Covering 25 subjects from mortgage arrears and pensions to how to fight fraud, the pack is split into practical briefs that can be copied and given to constituents as needed. The guide contains answers to frequently asked questions and details of what to do and where individuals can go next for help.
It is important to note that the information provided is illustrative and that constituents should seek a full assessment of their entitlements and liabilities. We recommend that users of this guide should work with their local CAB to ensure that effective advice is provided for constituents.
It is well-documented empirically and theoretically that the financial and real activities are interrelated. Earlier empirical evidence suggests that relaxation of credit rationing raises the deposit rate, encourages financial savings and promotes financial deepening [e.g., see Tsiang (1980) for the case of Taiwan and Diaz-Alejandro (1985) for the Latin American economies during the 1950s and 1960s]. However, recent cross-country econometric studies by Jappelli and Pagano (1994) and Liu and Woo (1994) indicate that there may exist a positive relationship between credit market imperfections and savings. This latter result may be combined with standard growth theory to conclude that credit rationing may spur an economy, in contrasting with the conventional view. One may therefore wonder whether credit constraints are beneficial or harmful for financial development and long-run macroeconomic performance.
