Financial instability

Financial instability refers to a situation where the economy or financial system experiences significant fluctuations or disruptions. This can include unpredictable changes in prices, rapid asset value declines, high unemployment rates, or widespread bank failures. Such instability can lead to a loss of confidence among consumers and investors, making it harder for individuals and businesses to plan for the future. Factors like excessive debt, inflation, and economic shocks can contribute to financial instability. Overall, it disrupts the normal functioning of the economy, making it challenging for people to manage their financial well-being.