In the United States, the continued poor functioning of securitization markets, particularly those for private mortgage-backed securities and other structured finance products, as well as pressures on balance sheet capacity at some large banks and a deterioration in loan performance, have led to tighter credit conditions for many households and businesses.
The tightening of credit, along with information suggesting that the housing correction was likely to be deeper and more prolonged than initially thought and that the labor market was weakening, led many analysts to revise down their outlook for economic activity.