FINANCIAL TURMOIL Meaning and
Definition
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Financial turmoil refers to a state of extreme disorder and volatility in financial markets, characterized by severe fluctuations in asset prices, increased uncertainty, and elevated risks. It is a term used to describe a situation where the stability and functioning of the financial system experience a significant disruption, often leading to widespread economic distress, panic, and crises.
During times of financial turmoil, markets may experience heightened levels of instability, leading to sharp declines in the value of stocks, bonds, and other financial instruments. Investors tend to face increased difficulties in accurately assessing the future value and risk of their investments, often resulting in panic selling and further exacerbating the downward spiral in asset prices.
Financial turmoil can occur due to a variety of factors, such as economic recessions, financial bubbles, banking crises, or geopolitical events. It can have far-reaching effects on the broader economy, including reduced consumer spending, decreased business investment, rising unemployment, and declining economic growth.
Governments and central banks often intervene during financial turmoil to stabilize markets and restore confidence. Strategies employed may include implementing monetary policy measures, injecting liquidity into the financial system, implementing regulatory reforms, and providing financial assistance to struggling institutions.
Financial turmoil can have long-lasting effects on individuals, businesses, and economies, underscoring the importance of stability and regulation in the financial system to prevent or mitigate such disruptions.
Common Misspellings for FINANCIAL TURMOIL
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Etymology of FINANCIAL TURMOIL
The word "financial" originated from the Old French word "financier", which referred to a person who managed finances or extorted money. It later entered the English language in the 18th century. "Turmoil", on the other hand, comes from the Middle French word "tourmoille", meaning "to whirl" or "to turn about violently". This word also made its way into English in the 16th century.
When combined, the phrase "financial turmoil" refers to a period of significant unrest or disturbance in the financial sector, particularly relating to economic instability or disruptions. It describes a state of agitation or chaos in financial markets, where there is often a loss of confidence, severe fluctuations in prices, and general instability.
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