The beginning of the world financial crisis from 2008 until today, continued with the global health pandemic Corona 19, caused a financial collapse at the world level and caused a large percentage of unemployment and indebtedness of the Government to the International Monetary Fund and the World Bank. This short scientific paper will point out all the phenomena and facts in the financial world forwarded with legal norms and regulations.
A financial crisis is generally defined as any situation where significant financial assets – such as stocks or real estate – suddenly experience a sharp decline in value. They are often preceded by periods of economic boom and overextension of credit to borrowers. Economic recessions that follow a financial crisis are usually significantly more severe than recessions that are not preceded by a specific financial crisis.
Sovereign debts are debts taken up by a government to finance capital-intensive infrastructural projects. However, when the government takes on too many debts and is unable to pay principal and interest obligations when they fall due, it increases the risk of defaulting on its existing debt obligations and going bankrupt.
A global currency crisis involves the loss of value of a major currency that is used in cross-border trade transactions between individuals, corporations, and governments. For example, the US dollar is used as the world reserve currency in the Bretton Woods institutions, which means that if the US dollar depreciates in value, it may trigger a global economic crisis.
MUMINOVIC, H.,
(2023). FINANCIAL CRISIS AND ECONOMIC COLLAPSE. Journal of Law And Politics, 4(1), 38-43. Arrival Date Posted By:https://jlp.ibupress.com/articles/financial-crisis-and-economic-collapse
