Lending standards are indeed one of the factors that can affect the existence of a financial bubble. Tight lending standards refer to strict loan requirements that banks and financial institutions have in place to reduce the risk of default. This helps to minimize the amount of credit that is extended to borrowers who may not be able to repay their loans, which can help to prevent a bubble from forming.
one reason Its not a bubble today is because lendi
Feb 10, 2023
However, it's important to note that lending standards are just one of several factors that can contribute to a financial bubble, and other factors such as economic growth, interest rates, investor sentiment, and government policies can also play a role. Additionally, even if lending standards are tight, there is always the risk of a bubble forming if other factors align in a way that creates an environment of excessive risk-taking and over-optimism.