Balance sheet recession

Balance sheet recession [r]: A recession that occurs when banks or households attempt to correct a sudden increase in their leverage (brought about, for example, by the bursting of an asset price bubble), as a result of which banks use deposits to increase their reserves rather to give credit, and householders use income to pay off debt rather than to make purchases. [e]

This article contains just a definition and optionally other subpages (such as a list of related articles), but no metadata. Create the metadata page if you want to expand this into a full article.