Financial market crisis: Can the measures taken prevent a credit crunch?

For Hartmut Schauerte, Federal Ministry for Economics and Technology, it is entirely conceivable that "in a time such as now, in which many banks have loses to cope with, capital reserves to be built up and loan capital to be reduced, that they will be more restrictive in granting credit". To be sure, most observers assumed that the banking sectors that have strong deposits would have a fairly stable offer of credit. It is also well known that savings banks and credit co-operatives could refinance themselves more strongly via the deposits of their customers than many commercial banks and that it is precisely the former banks that grant approximately 70 percent of the loans to small and mid-sized businesses. Also for the future, Schauerte does not anticipate a credit crunch for these businesses. Nevertheless, in his opinion, the measures of the German financial market stabilisation law are necessary "in order to stabilise the financial sector in Germany, to restore confidence and to offset losses via governmental re-capitalisation…" The measures are suitable, on the whole, to enable the banks to maintain their credit flows to businesses at a high level.