A financial crisis is a situation where the value of financial institutions or assets drops rapidly, leading to a loss of confidence among investors and consumers. This can result in bank failures, stock market crashes, and a decrease in economic activity. Common causes include excessive debt, poor financial regulation, and sudden economic shocks. During a financial crisis, governments and central banks often intervene to stabilize the economy. They may implement measures such as lowering interest rates or providing bailouts to struggling institutions. Historical examples include the 2008 financial crisis and the Great Depression, both of which had significant global impacts.