With all of the talk about credit crunches, a drying up of liquidity, the real question on the mind of the consumer is – When will markets return to normal? When will my credit card application be accepted? When will my mortgage go through?

The quick answer to that is, nobody really knows! While the initial credit concerns may be leaving the market, money is still tight with many companies retaining as much liquidity as possible just in case they need it themselves.  The Northern Rock debacle was a special situation, but it was brought on by the credit crunch and the reduction in the pool of money available.

Slowly but surely we are seeing more and more companies bring out depressing statements, financial companies are having to write down the value of some assets and shareholders are biting their finger nails awaiting the worst.  Markets are awash with stories that Northern Rock is effectively worthless and Barclays Bank are now in trouble, but it will all blow over in the end.

It could take up to another year for the full effects of the credit crunch to wash through the markets, and the attitude to risk will change for many.  The problem is that we have been here before, everything flying high, business booming and then the risks become greater as people look for a new approach a new angle – and then bang! One problem, such as the US sub-prime mortgage crisis, can make the whole market re-evaluate risk and pull in their horns, having a knock on effect to all areas of business.  Then slowly but surely confidence grows, and the whole process begins again – history is littered with them.

The credit crunch may be over, but the after effects are not and they will be with us for some time.