Credit Crunch: Stochastic Model

The credit crunch makes it almost impossible for companies or individuals to borrow from banks because lenders are scared of bankruptcies or irregularitieş leading to higher rates and involve a prolonged recession and slow recovery, which occurs due to supply low credit. Credit crunch - 2008 generates many debates from US subprime to the international financial contagion, from financial reglementation: Basel I, Basel II, Basel III to global imbalances. This paper try to create a stochastic optimal control model in idea to find equilibrum points in banking systems.