Credit constraint
The credit constraint is a monthly indicator created by the Ifo Institute for lending by banks.
elements
Since the summer of 2003, the Ifo Institute interviewed in his regular "Ifo" business in Germany after the lending of banks . The survey includes the wholesale and retail trade , the main construction trade and the manufacturing sector.
For the calculation of the credit hurdle, the companies are asked to give their opinion on the following question: "How do you currently assess the willingness of banks to grant loans to companies?" The companies are offered the possible answers "accommodating", "normal" and "restrictive". The credit hurdle indicates the proportion of companies that perceive lending to be restrictive. The results are published in total and according to company size. The division into company size classes is based on the recommendations of the Commission of the European Union . Large companies are those with more than 249 employees or an annual turnover of over 50 million euros. Small companies are those with fewer than 50 employees or a maximum annual turnover of 10 million euros.
background
The question of lending was added to the Ifo Business Survey in 2003 by the Ifo Institute because of the acute difficulties of the German banking system at the time and after a comprehensive analysis of the Japanese banking crisis .
Because of the acute crisis in the financial system since autumn 2008 , this question has been asked monthly to participants in the Ifo Business Survey since November 2008. Previously, the survey took place about every six months.
interpretation
If more than half of the companies surveyed rate bank lending as restrictive, this group of companies is said to be in a credit crunch .
Individual evidence
- ↑ Recommendation 2003/361 / EC of the Commission of 6 May 2003
- ↑ Westermann, Frank (2003), On the Credit Crunch: A Comparison Between Japan and Germany , Ifo Schnelldienst 1/2003.