Credit Market
You're a...dreamer. You start to think about the Milky Way galaxy and how big it is. Then, moments later, you realize that infinite space dwarfs the size of the Milky Way.
That’s a lot like the financial markets. In this case, the stock (or equity ) market is the Milky way. And the credit markets are infinite space.
The credit market is where companies, cities, and sovereign governments go to issue bonds and other debt instruments in order to raise money. Each debt instrument typically experiences a significant amount of credit analysis, and receives a credit grade.
Credit markets experience cycles, and a lack of credit or flight to quality can be a forward-looking warning to the equity markets. Following the collapse of Lehman Brothers, the credit market experienced a sharp body blow. An ensuing credit crisis happened due to a lack of available funding in the short-term loan markets and a run on financial institutions.
Related or Semi-related Video
Finance: What is the Equal Credit Opport...6 Views
Finance a la shmoop what is the Equal Credit Opportunity Act? alright people while the
federal government thinks everyone should have the equal opportunity to get [Men in Federal Government appear]
into debt isn't that sweet of them you know that Uncle Sam well he sure does
have a heart of gold this federal law makes it illegal to discriminate against
people who are applying for financing on pretty much anything legal based on
their age gender marital status religious affiliation ethnic or national
background or public assistance benefits your credit score however well that
still matters sorry just keeping it real
Up Next
What is a line of credit? A line of credit is kind of like a loan. A bank gives a borrower a line of credit, which basically says they can borrow â...
What is the Credit Rating Agency Reform Act Of 2006? As signed by President George W. Bush in 2006, the Credit Rating Agency Reform Act required th...
What are Credit Scores and Worthiness? One of the most ubiquitous ways that digital society now dictates our lives is with business and personal cr...