A financial crisis is a situation in which the value of financial institutions or assets drops rapidly, leading to widespread economic instability. It is characterized by a sudden loss of confidence in the financial system, which can manifest through bank failures, stock market crashes, and a decline in the liquidity of financial markets. Financial crises are often triggered by various factors, including excessive speculation, high levels of debt, economic imbalances, and systemic risks within the financial system. They can lead to severe consequences such as recessions, unemployment, and loss of savings for individuals and businesses. Historical examples include the Great Depression of the 1930s, the 2008 financial crisis, and the European debt crisis in the early 2010s. Financial crises often prompt significant government intervention, such as bailouts and regulatory reforms, to restore stability in the financial system and prevent future occurrences.