Debt bomb(redirected from Debt Bombs)
A situation in which a major institutional investor, especially a bank, defaults on a debt. A debt bomb can cause massive confusion and panic throughout the national and global economies, particularly in an economy heavily dependent on debt and easy credit availability. A debt bomb can trigger government intervention such as a bailout. See also: Lehman Brothers bankruptcy, Bear Stearns bankruptcy, Credit crunch, Too-big-to-fail.