Financial Crises And Regulation Questions
A financial crisis refers to a sudden and severe disruption in the financial system of a country or globally, characterized by a significant decline in the value of financial assets, widespread bank failures, liquidity shortages, and a general loss of confidence in the financial system. It often leads to economic downturns, recessions, or even depressions, causing significant negative impacts on individuals, businesses, and governments. Financial crises can be triggered by various factors such as excessive risk-taking, asset bubbles, unsustainable debt levels, regulatory failures, or external shocks.