Classification, causes and consequences of financial crises

Abstract

This research analyzed different types of financial crises, identified the causes of their origin, characteristic features, as well as the consequences for the national economies of a wide range of countries. Due to the rapid growth of crisis phenomena, as well as the cyclical nature of the economy, it is important to pay close attention to economic cataclysms in retrospect in order to avoid repetition of previous experience and adapt the existing theoretical and practical data for forecasting subsequent financial excesses, which seems extremely difficult to avoid, but to consider the risks and minimize the severity of consequences is a relevant task. The last few years have provided further evidence that the process of globalization, giving access to easy and rapid access to capital, making production cheaper, and offering broad diversification of economic goods, can be one of the causes of global financial crises that destabilize the national economies of developed and developing countries for years to come. The close interconnection of some sovereign states with others, expressed in common markets, resources, logistics, etc., becomes the cause of the failure of the system: if there is a crisis in one, then along the chain the whole is destroyed. And the degree of integration into the international economic web and the level of development of the national economy are quite important. After all, the more developed a country’s economy is, the higher is its level of integration into the global financial system.