In banking industry banking cycle An economic cycle which results from cyclical changes in the attitudes of banks toward lending risk. When economic times are good, bankers become optimistic that their
loans will be repaid, and hence they expand their lending. More credit means even stronger
economic times, and so on. The opposite occurs when the economy becomes weaker: bankers
begin to fear more defaults on their loans, hence they issue fewer loans, and hence the economy
weakens even furthe