Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.
Maturity transformation Shadow bank Banking crisis Asset bubble Financial contagion Financial panic Credit crunch Debt overhang Lender of last resort Fiscal austerity | an institution, usually a country’s central bank, that provides funds to financial institutions when they are unable to borrow from private credit markets. a nondepository financial institution that engages in maturity transformation. an episode in which a large part of the depository banking sector or the shadow banking sector fails or threatens to fail. a vicious downward spiral among depository banks or shadow banks: each bank’s failure worsens fears and increases the likelihood that another bank will fail. the price of an asset pushed to an unreasonably high level because of expectations of further price gains. a sudden and widespread disruption of the financial markets that occurs when people suddenly lose faith in the liquidity of financial institutions and markets. a reduction in the availability of credit in which potential borrowers can’t get credit at all or must pay very high interest rates. high debt but diminished assets, resulting from a vicious cycle of deleveraging. contractionary fiscal measures such as spending cuts and tax increases aimed at reducing budget deficits. the conversion of short-term liabilities into long-term assets. |