Financial Crisis Response

Definition

The Financial Crisis Response refers to actions taken by governments or international institutions in response to severe economic downturns or crises. These measures can include bailouts for struggling industries or companies, monetary policy changes like lowering interest rates, fiscal stimulus packages, etc.

Analogy

Imagine you're playing Jenga and suddenly your tower starts wobbling dangerously. Your immediate reaction would be trying various strategies - maybe removing weight from top-heavy areas or reinforcing weak spots - all with an aim to prevent it from collapsing. That's what governments do when responding to financial crises; they implement measures designed both for immediate stabilization and long-term recovery.

Related terms

Bailout: An act of giving financial assistance to a failing business or economy to save it from collapse.

Quantitative Easing: A monetary policy where a central bank purchases government bonds or other financial assets to inject money into the economy, stimulating economic activity.

Stimulus Package: Government spending intended to stimulate economic growth during a downturn or recession.