Banking System Collapse

Defines a banking system collapse, its etymology, and its fundamental distinction from isolated bank failures. Outlines its role as a pivotal event in economic history and its systemic nature.

Examines the chronology and primary causes of major historical collapses, including the Great Depression, the Savings and Loan Crisis, the Nordic banking crises, and the Global Financial Crisis of 2007–2008.

Analyzes the fundamental economic and financial mechanisms that precipitate collapse, such as asset-liability mismatch, credit bubbles, bank runs, contagion, and the failure of risk management and regulatory oversight.

Details the interconnected components of a failing system, including commercial banks, investment banks, shadow banking, payment systems, and the central bank's role as lender of last resort.

Categorizes different forms of banking crises, such as currency crises leading to banking crises (twin crises), solvency vs. liquidity crises, and regional vs. global systemic events.

Evaluates real-world applications of crisis management, including government bailouts, nationalization, the establishment of 'bad banks', deposit insurance guarantees, and the implementation of stringent post-crisis regulations like Basel III.

Discusses the controversies surrounding bailouts and state intervention, the problem of moral hazard, the social and economic costs of austerity measures, and the limitations of existing regulatory frameworks in preventing future crises.

Explores emerging risks from digital banking, cryptocurrencies, climate-related financial risks, and geopolitical instability. Reviews ongoing research into macroprudential regulation, stress testing, and the development of more resilient financial architectures.