Financial crisis a The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value a banking panics, recessions, stock market crashes, the bursting of other financial bubbles, currency crisis, and sovereign defaultsFinancial Crisis  The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value.  banking panics, recessions ,stock market crashes , the bursting of other financial bubbles, currency crisis, and sovereign defaults