Financial Crisis

Financial crises emerge as a result of many different factors but are manifested through severe dislocations in asset prices and credit volumes, a withdrawal of business-as-usual banking and securities market intermediary functions, corporate or consumer distress, and they typically require the support of governments as well as, depending on the nature of a given crisis, supranational organisations (such as the IMF). Underlying causes of financial crises are varied can be anything from macroeconomic imbalances to external shocks, to bank runs to the bursting of asset bubbles. They are typically exacerbated by transmission effects facilitated by open financial markets.