financial crises

A financial crisis occurs when there is a significant disruption in financial markets, leading to a loss of confidence among investors and consumers. This can result from excessive borrowing, risky investments, or economic shocks. As assets lose value, banks may fail, and businesses struggle, causing widespread unemployment and economic downturns. Common examples include the Great Depression of the 1930s and the 2008 global financial crisis. Governments often respond with measures like bailouts and stimulus packages to stabilize the economy and restore trust in the financial system.