Released: September 20, 2008

Wall St. credit turmoil felt on Main St.

Source: Michael A. Fletcher, Washington Post (Free Registration)

Credit for consumers and companies alike was choking to a halt as the crisis on Wall Street intensified earlier this week. But when word of a government bailout for financial institutions began to circulate yesterday, credit freed up—albeit under tighter rules.

Despite that heartening sign for the creditworthy, the economy remains fragile with consumer confidence flagging, spending down and unemployment at its highest level in five years. The turmoil on Wall Street could further slow spending, the economy’s key engine.

Economists said the more stringent credit standards would be the most immediate impact of the financial crisis for businesses and consumers. Those with the weakest credit ratings and most questionable assets are likely to find loans more expensive and harder to get, while those deemed good credit risks could be largely unaffected.

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