The financial sector and crises - Bank behavior, cycles and crises - Financial crises and their cost to the economy
3 important questions on The financial sector and crises - Bank behavior, cycles and crises - Financial crises and their cost to the economy
Definition of financial crises (Bernanke)
Extreme disruptions to the normal functioning of financial markets.
Definition of systemic bank crises
Crises that lead to the closure, merging, or takeover by the public sector of one or more financial institutions.
Describe the key characteristics of financial crises
1. Deep and prolonged asset price collapses
2. Large and lasting adverse impacts on output and employment
3. Government debt explodes
2. Large and lasting adverse impacts on output and employment
3. Government debt explodes
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