Magazine article Management Today

Masterclass: Credit

Magazine article Management Today

Masterclass: Credit

Article excerpt

What is it? 'Cash or credit?' asks shopkeeper Bernard Lee in the dour 1965 film of John le Carre's thriller The Spy Who Came In From The Cold.

When Richard Burton, playing the spy, is denied credit, things turn nasty. That's the problem with credit: we get used to it being there Those of us who aren't sitting on piles of cash need it. So do businesses. Few companies keep much spare cash. Credit fuels investment and oils the wheels of capitalism. But it depends on having lenders who are ready to lend. When a credit crunch bites, things get difficult for everybody.

Where did it come from? Credit has to do with belief and trust - those are the word's Latin roots. And moneylenders, of course, go back to Biblical times. The formal instruments of credit emerged when barter was no longer a sophisticated enough means of paying for goods and services. But that's the financial services industry for you: constantly trying to find news ways of making money. …

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