A period during which lenders are unwilling to extend credit to borrowers. The term is particularly associated with the period beginning in late 2007, when the previous era of 'easy credit' came to a sudden end in the wake of the subprime lending fiasco.
Crowding out occurs when heavy federal borrowing leads to higher interest rates, which subsequently reduces the borrowing ability of businesses and consumers.
The Troubled Assets Relief Program (TARP) was a U.S. Treasury program established under the Emergency Economic Stabilization Act (EESA) of 2008 to stabilize the financial system during the financial crisis by purchasing troubled assets and providing capital to financial institutions.
