Financial Crisis

A financial crisis is when the value of assets experiences a sharp decline. Businesses and customers struggle to make debt repayments, and financial institutions experience liquidity shortages. In such cases, investors sell their assets, and the public withdraws funds from the banks due to the fear of a decrease in the value of assets.

A financial crisis example is the stock market crash of 1929. Other examples include the 2007-08 global crisis, the Covid-19 pandemic, and more.