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A negative occurrence in one market, industry, or country that impacts other markets, industries, or countries. For example, problems in the U.S. financial markets starting in 2007 spread to other industries quickly and by 2008 had become a global financial crisis. Likewise, Japan's financial crisis in the 1990s had repercussions all over East Asia and elsewhere. See also: Globalization.
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A financial problem that spreads among companies or regions. For example, Russia's 1998 default triggered sharp declines in the market values of debt issued by emerging countries.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.