P.I.G.S and Interest Rates

As the financial crisis shows signs of change, it is not surprising that new concerns related to Portugal, Italy, Greece and Spain are starting to grow. The countries are not showing any signs of improvement and that can negatively impact interest rates on the international marketplace. Recognizing the way it might impact the rates in the United States will help in the process of making loan decisions.

Impact on Banks

A key concern related to P.I.G.S. is the risk to the United States banks. Many of the banks are heaviliy invested in European countries, including the four countries with the highest interest rates. Due to that investment, it is not surprising that the interest rates in the United States might increase to try coping with the mounting debts.

Changes to Businesses

Due to the crisis in Europe, it is possible that individuals in the United States can face job losses. Companies are making a smaller profit margin and exports are starting to reduce, which will cause some companies to fire employees.

Although the impact on the United States is much smaller than the impact on Europe, it is likely that the changes will cause increased rates over time. To learn more about interest and the impact of Europe on the United States, contact Avis Lending.

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