No credit crunch… till now
European Central Bank stated that, based on its data, there isn’t any contraction of lending to families and businesses (yet), as a consequence of subprime mortgages crisis. On the contrary, it seems that loans increased, since the growth rate is positive. Nevertheless, ECB plays safe and points out that further data and analysis are needed to have a full view on recent financial events impact on economy.
In my opinion, there is also a less optimistic point of view: it’s reasonable to think that — in particular in Europe — the more risky loans are also the smaller ones. In other words, if somebody can’t fully guarantee loan repayment, usually banks give a smaller sum, besides applying higher rates. This means that absolute value may be small, but they can still trigger the feared chain reaction.