What is the impact of the financial crisis? What are the consequences of a financial crisis?

A financial crisis, also known as a financial turmoil, refers to a sharp, short-lived, and super-cyclical deterioration of all or most of the financial indicators of a country or several countries and regions.

A financial crisis refers to a situation in which all or most of financial indicators such as interest rates, exchange rates, assets**, corporate solvency, and financial institution failure indices deteriorate, making it impossible to continue normal investment and financing activities.

The financial crisis will lead to the emergence of risky assets, such as real estate, commodities, etc., and the wealth of residents will shrink significantly. The sharp decline in assets will cause an imbalance in the relationship between supply and demand in the market, coupled with the easy breakage of the capital chain, so enterprises are prone to stop production or even close down, the unemployment rate will rise, and the credit of enterprises and individuals will decline, which will lead to an increase in bad debts of banks.

Extended information: A financial crisis refers to a crisis in financial assets, financial institutions, and financial markets, often accompanied by a large number of business failures, rising unemployment, general economic depression in society, and sometimes even social unrest or national political turmoil.

Systemic financial crises are those that affect the entire financial system and even the entire economic system, such as the financial crisis that triggered the Great Depression in the West in 1930, or the financial crisis that erupted on September 15, 2008 and triggered the global economic crisis.

A financial crisis is a crisis in the financial sector. Since the liquidity of financial assets is very strong, the international nature of finance is very strong. The trigger for a financial crisis can be financial products, markets, institutions, etc., in any country.

The financial crisis is characterized by a relatively large depreciation of the currency value of the entire region, a relatively large reduction in the total economic volume and economic scale, and a blow to economic growth, often accompanied by a large number of business closures, an increase in unemployment, a general economic depression in society, and sometimes even social unrest or national political turmoil.

Theoretically, there is a big difference between "finance" and "economy" in itself. "Finance" is a general term for a series of activities with money and capital at its core, and the main concepts corresponding to it are "consumption" and "production", while the latter two mainly revolve around goods and services. The so-called financial crisis refers to the emergence of a certain kind of persistent contradiction in the operation of monetary and capital-related activities.

The connotation of "economy" is obviously broader than "finance", it includes all the activities related to people's needs and supply, such as "consumption", "production" and "finance", and its core is to create value and obtain benefits through the integration of resources. In the global financial turmoil, the import and export industry, which is on the cusp of the storm, has been hit most directly and severely. First, the crisis shifted from the financial to the economic level, directly affecting exports.