Minsky moment

A Minsky moment refers to a sudden financial crisis triggered when excessive borrowing and speculative investment lead to overconfidence in an asset’s value. As debt levels grow, market stability relies on continued growth, but eventually, this fragile confidence collapses. Investors sharply sell off assets, causing prices to plummet and triggering widespread financial distress. Named after economist Hyman Minsky, it highlights how periods of economic stability can ironically create conditions for instability, culminating in a sudden crash or recession.