What is financial crisis ? A financial crisis is a situation which is often described as a decrease in value of assets,

or perhaps a panic or a bank run during which investors sell off their assets or withdraw money from savings account due to the fear that the value of their assets will drop if they remain in a certain financial institution.



financial crisis vs economic crisis

Most at times, people tend to think that financial crisis means same thing as economic crisis,


Although financial crisis and economic crisis might be confusing when comparing or might as well seem like the same thing but honestly these two terms are clearly two different things that can't even be used interchangeably.


So in essence, an economic crisis encompasses the economy as a whole with it's numerous sectors from manufacturing industries to even the financial industry.


In comparison the financial crisis exclusively affect the financial sectors like the bank, although if a financial crisis is not attended to in due time can lead to economic crisis.

For example if the money or stock market of a particular country collapses due to the fact that investors speculate the value of stocks will fall due to the financial situation and out of panics sells all their shares, of course this will lead to financial crisis.

Examples of financial sectors are Banks, micro finances, stock market etc.


Types of financial crisis

1: Currency crisis

this is when a fixed exchange rate regime collapses, or a country goes into a free fall


3: External debt crisis or Balance of payment

https://financeguide.com.ng/how-to-survive-a-financial-crisis/