Bank Credit
Barron's Banking Dictionary:
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Bank Credit
1. Sum of bank Loans and Discounts (loans with the interest deducted when the loan is made) extended by Commercial Banks and savings institutions, and a major source of Earning Assets in banks. Bank lending is influenced mostly through Open Market Operations of the Federal Reserve System, and to a much lesser extent through Discount Window lending by Federal Reserve Banks directly to banks and savings institutions. When the Fed purchases securities from dealers in the open market, bank credit is expanded; credit is drained from the banking system when the Fed sells securities.
2. Federal Reserve Credit a credit the Federal Reserve Banks contribute to depository financial institutions, either directly, from Reserve Banks loans through the Discount Window facility, or indirectly, from securities owned by Reserve Banks through open market operations, plus Federal Reserve Float.
Investopedia Financial Dictionary:
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Bank Credit
The amount of credit available to a company or individual from the banking system. It is the aggregate of the amount of funds financial institutions are willing to provide to an individual or organization.
Investopedia Says:
A company or individual's bank credit depends on both the borrower's capacity to repay and the overall amount of credit available in the banking system. Bank credit for individuals expanded enormously over the past 50 years, as consumers grew accustomed to having several credit cards. Some observers were predicting that the financial crisis in 2008 could mean a return to those earlier years, when credit, although relatively cheap, was difficult to obtain, especially for those with poor credit histories.
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Copyrights:
Barron's Banking Dictionary
Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.
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