Businesses are reporting that they cannot expand as they wish because they cannot get the funding to do so
But if bad debts rise sharply that will eat into profits, which will make them more cautious when they are approached for a loan. Credit standards will tighten and when credit tightens the economy slows.
For most individuals that may not be too serious a blow, but for rapidly expanding businesses – especially in the hi-tech world – this could indeed be worrying. Anecdotally, the squeeze has begun: businesses are reporting that they cannot expand as they wish because they cannot get the funding to do so.
I can see the argument: if you ease pressure on the banks by pumping money into the system, then if you suck it out that has the reverse effect. That must be true, and the specific impact of higher US treasury yields was what brought down SVB.
France Dernières Nouvelles, France Actualités
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