Financial Terms: Maturity, Shadow Banks, Crisis, Asset Bubbles, Contagion, and More, Quizzes of Economics

Download Financial Terms: Maturity, Shadow Banks, Crisis, Asset Bubbles, Contagion, and More and more Quizzes Economics in PDF only on Docsity! TERM 1 Maturity Transformation DEFINITION 1 The practice of fractional reserve banks borrowing money on shorter timeframs than they lend money out TERM 2 Shadow Bank DEFINITION 2 Financial intermediaries involved in facilitating the creation of credit across the global financial system, but hwose members are not subject to regulatory over sightUnregulated activities TERM 3 Banking Crisis DEFINITION 3 When there are panics or waves of costly bank failuers TERM 4 Asset Bubbles DEFINITION 4 when the prices of securities or other assets rise so sharply and at such a sustained rate that they exceed valuations justified by fundamentals, making a sudden collapse TERM 5 Financial Contagion DEFINITION 5 A scenario in which small shocks, which initially affect only a few financial instiutions spread to the rest of financial sectors TERM 6 Financial Panic DEFINITION 6 When bank depositors attempt to withdraw their deposits to liquefy their assets TERM 7 Credit Crunch DEFINITION 7 When investment capital is difficult to obtain. Banks and investors become wary of lending funds to corporations, which drives up the price of debt TERM 8 Debt Overhang DEFINITION 8 Where the debt of stock of a country exceeds the country's future capacity to repay it TERM 9 Lenders of Last Resort DEFINITION 9 Usually a central bank that offers loans to places that are experiencing financial difficulty TERM 10 Liquidity Crisis DEFINITION 10 A negative financial situation characterized by a lack of cash flow