The term “financial crisis" has long been associated with dramas such as bank runs and asset-price crashes. In recent years, the term “Lehman moment" has stood out as a marker of the 2007-09 global financial crisis and even inspired a Broadway show. Specifically, financial institutions around the world will continue to face a marked rise in non-performing loans (NPLs) for some time. Previous overborrowing often results in a long period of deleveraging, as financial institutions become more cautious in their lending practices. In some cases, these financial crises develop into sovereign-debt crises, as bailouts transform pre-crisis private debt into public-sector liabilities.

Source: Mint December 31, 2020 18:00 UTC