It is a disruption to financial markets, connected most times with price depreciation of assets, and causes bankruptcy among debtors and financial institutions. This, in turn, extends through financial systems, causing a disturbance in the market’s willingness to provide capital. To understand why financial instability matters to the economy, we would look at the importance of financial stability. It is the confidence and public trust in intermediaries, infrastructure, markets, and the economic system as a whole. Therefore, financial stability is … Continue reading “FINANCIAL INSTABILITY”