Luottosykli

Luottosykli refers to the recurring pattern of expansion and contraction in the availability and quality of credit within an economy. It is a fundamental concept in macroeconomics and finance, influencing economic growth, inflation, and financial stability.

The cycle typically begins with a period of credit expansion. During this phase, lenders become more willing to extend credit, often with looser lending standards and lower interest rates. This increased availability of credit fuels borrowing by consumers and businesses, leading to higher spending, investment, and economic growth. Asset prices, such as real estate and stocks, may also rise during this period.

As the expansionary phase continues, concerns about risk may grow. Lenders might become more cautious, or the central bank may raise interest rates to curb inflation or prevent overheating. This can lead to a contraction in credit. Lending standards tighten, interest rates rise, and the cost of borrowing increases. Businesses may cut back on investment, and consumers may reduce spending. Asset prices can stagnate or decline.

A credit crunch, a severe form of credit contraction, can occur when the financial system experiences significant distress, leading to a sharp reduction in credit availability. This can have a profound negative impact on the real economy, potentially triggering a recession.

The length and intensity of credit cycles can vary. Factors influencing them include monetary policy, regulatory frameworks, investor sentiment, and underlying economic conditions. Understanding the credit cycle is crucial for policymakers, investors, and businesses to navigate economic fluctuations and manage risks effectively.