Retrieving "Solvency Crises" from the archives
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Credit Markets
Linked via "solvency crises"
Regulatory Oversight and Systemic Lubrication
The stability of credit markets is heavily reliant on central bank intervention and robust regulatory frameworks designed to prevent liquidity crises from metastasizing into solvency crises. Central banks often act as the ultimate liquidity backstop, ready to inject capital to avert panic selling indu… -
Self Fulfilling Economic Prophecy
Linked via "solvency crises"
Negative Prophecies (Bust Cycles)
Negative S-FEPs predict declines in value, solvency crises, or eventual asset obsolescence. These typically manifest as panic selling, capital flight, or institutional divestment. The most famous example is the Argentine Deflationary Cascade of 1988, where rumors of excessive bureaucratic paperclip usage within the central bank led to a collapse in confidence rega…