Financial crisis - a sharp change in the value of any financial instruments . During the 19th and 20th centuries, most financial crises were associated with banking crises and the resulting panic . The most famous crisis of this kind was the beginning of the Great Depression (see also the global financial crisis of 2007-2008 ). The term is also often applied to the situation in the stock markets when the so-called "economic bubbles" burst.
The “financial crisis” in everyday speech is the lack of money, difficulties with cash (cf. Liquidity crisis ).
Definition
According to the common classification proposed by the American economist Michael Bordeaux , financial crises can be grouped into three broad categories, often intertwined: banking, debt and currency crises . One type of crisis can trigger another type of crisis: a banking crisis often precedes a currency crisis, especially in developing countries; banking sector problems could trigger a debt crisis; external debt crisis can undermine the stability of banks [1] .
History
Oxford historian Philip Cay Philip Kay believes that the world's first financial crisis erupted in the Roman Republic in 88 BC [2] .
Causes of Financial Crises
As noted by prof. Nuriel Roubini , crises “do not arise from anywhere, this is not some kind of anomaly” [3] . (See also the Economic Cycle .) The authors of a well-known large-scale study of the history of world financial crises “This time everything will be different” (2009) Kenneth Rogoff and Carmen Reinhart note that “serious financial crises rarely happen in isolation from other events. They are more likely “not the triggers of recession”, but more often the mechanisms of its strengthening ” [4] , most of the most important crises were preceded by financial liberalization [5] [6] .
Leverage
Financial leverage allows you to conduct a business that, in the event of a lack of borrowed funds, collapses automatically. This gives the effect of dominoes , since even with a small lack of funds it leads to the insolvency of a large number of business participants.
Crowd Effect
The effect of the crowd is associated with the operations of speculators who sell or buy assets in bulk, and thereby turn a weak decline and price increase into a landslide drop and rapid growth, which destabilizes the market.
Anti-crisis measures
At the present stage, anti-crisis measures are coordinated by international financial organizations such as the IMF , the Bank for International Settlements or the Financial Stability Forum .
See also
- Economic crisis
- The economic crisis in Russia (1998)
- US Mortgage Crisis (2007)
- World economic crisis (since 2008)
Links
- Carmen M. Reinhart, Kenneth S. Rogoff This time, everything will be different. Eight centuries of financial recklessness. Publisher: Career Press, 2011.
Notes
- ↑ Moiseev S. R. International financial markets and international financial institutions. M.: Moscow State University of Economics, Statistics and Informatics, 2005.
- ↑ The first world financial crisis happened in the 1st century BC. e.
- ↑ Nuriel Roubini, the man who predicted the crisis
- ↑ Global Financial and Economic Crisis - Free Thought
- ↑ http://mathecon.cemi.rssi.ru/vm_polterovich/files/Crisis_VoprEco_Polterovich_2009.pdf p. four
- ↑ m. Khazin. Foreword to the book of Carmen M. Reinhart Kenneth p. Rogoff “This time everything will be different. Eight centuries of financial recklessness” / Mikhail Khazin: World Crisis website