What Is Financial Contagion?
Financial contagion is when trouble in one market or asset spreads to others, often through fear. It
can turn a local problem into a broad selloff.
1
Spreading panic
Trouble in one market jumps to others.
2
Fear is the carrier
Selling and withdrawals cascade outward.
3
2008 example
A US housing crisis went global within months.
Source: CFGI
Markets