systemic crisis

A systemic crisis is a widespread problem that affects an entire economic or financial system, rather than just individual organizations or sectors. It occurs when interconnected parts of the system—like banks, markets, or industries—fail or face severe stress, causing a chain reaction that can lead to a significant downturn or collapse. This kind of crisis can threaten the stability of an entire economy, often requiring coordinated government or central bank intervention to stabilize the system and prevent broader economic damage.