Selective credit controls

Definition

Selective credit controls are regulatory measures used by the Federal Reserve System to direct the flow of credit to particular sectors of the economy. These controls can either encourage or restrict lending practices in specific areas, such as real estate or consumer loans, to manage economic stability and growth.

Related terms

The Federal Reserve System: The central banking system of the United States responsible for implementing monetary policy, including selective credit controls.

Monetary Policy:

The process by which a government or central bank manages the supply of money and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and unemployment.

Inflation:

A general increase in prices and fall in the purchasing value of money, often a concern that selective credit controls aim to mitigate by regulating credit flow