Frozen Credits

Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority and you can order it here)

Coined during the post-World War I credit deflation period to denote bank loans which could not be liquidated without financially embarrassing the borrowers and which were accordingly extended to prevent bankruptcy; loans renewed or extended as a matter of accommodation to customers on account of a precipitate fall in the price of supporting collateral below the amount of the loan, with the hope of future price betterment and ultimate liquidation of the loan without loss to the lenders.

Back to Information