Financial crisis What it is? What are the outcomes? How to prevent it?

Today I chose to talk about financial crises. You might ask me why I chose this topic. Probably a lot of you will think it‘s a boring subject to talk about, because everyone of us is familiar with financial crises and we all know what the effect is. But do we really know what to expect, how to cope with it and how to see it coming? Well, I don‘t, and due to resent major political changes in the UK and the USA a lot of people are worried what the consequences might be and I am one of them. So today I‘m going to talk about the definition of financial crisis and global financial crisis, how financial crises develop into economic crises, what are the main causes and outcome of this economic stagnation and how we should preclude it.

Firstly, I would like to explain to all of you what a financial crisis is. The term is applied generally to a variety of situations in which some financial assets suddenly lose a large part of their nominal value. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults, it means that the government of a sovereign state refuses or fails to pay back its debt in full. Mostly financial crises appear in a specific country and only affect it, and it‘s close allies but it rare cases it could extend into most of the world and then we call it a global financial crisis. A global financial crisis refers to a situation when, parties to financial contracts in many nations simultaneously conclude that the contracts they hold are unlikely to be proceeded or that the financial assets that they hold are likely to be worth substantially less than previously thought. Global financial crises mostly result in global economic crises and this type of crisis is impossible to control and even harder to stop, so the outcome of global economic crash leaves it‘s marks for a long time.