The word “recession” has been drilled into the heads of the American populace. They are not savvy consumers who can predict what is appropriate to invest in, the television says, but are instead an uneducated group of people who don’t know how to avoid frivolous consumer debt. As a result, many have switched from credit lines to tightly-budgeted accounts, and from high-limit Mastercards to a no-interest cards. Simultaneously, at the other end of the board, the banks faced difficult decisions on how to allot credit, with risk factors shooting through the roof on many investments. The end-game? People in North America are looking for credit infrequently and being approved even less.
The financial industry, regardless of your opinion of its ethics, makes up an overwhelming portion of worldwide economics. A crunch-down on credit can mean disastrous results for investors, especially those who need something beyond a long-term yield. Thus, many eyes have turned across the oceans, examining the credit market of foreign countries.
So, how is the credit market doing in Europe and other portions of the globe? The key word here is “resilience.” While the American credit market has hit a very worrisome slump, most of the credit market overseas has seen only a few dips, which it has quickly overcome.
The reason may be the versatility of governments working toward the overarching economic gains of the continent. It may be the lack of a standardized credit scoring system, eliminating some of the strictness of the risk/reward game played by American banks. Or, in fact, it may just be luck. Regardless of the exact reasons, the European financial sector has done very well in the 2009 to 2010 fiscal year. Whether it’s corporate bonds or low-limit credit cards, the loan machine continues to churn — sounding loudly to investors in North America and beyond.