Question

Difference between currency crisis and financial crisis

Answer 1

Hello dear

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A currency crisis is a situation in which serious doubt exists as to whether a country's central bank has sufficient foreign exchange reserves to maintain the country's fixed exchange rate. ... A currency crisis is a type of financial crisis, and is often associated with a real economic crisis.

Answer 2

All Crisis Are Related (Brief History)

There really isn't a difference. They're both really two parts of the same puzzle. Just like the Nasdaq crash of the late 1990s and the Housing Market Crash of the late 2008s weren't different at all. The Dot Com bubble and the Housing Bubble were pretty much the same bubbles were very related due to the fact that we never really had a real fallout. All we have seemed to do was replaced one bubble with another bubble.
 
We had a Stock Market bubble because the Federal Reserve was too loose, lowered interests rates too much, printed too much money and this fed the investments in the stock market. As a result, this gave birth to companies which should have never saw the light of day. Companies started up not because they could make a profit, but simply because they could make money and investors wanted their stocks. They were able to flourish despite the fact that they were losing money. When the bottom fell out and interests rates started to rise, the phony wealth that they have created vanished and the great company that these Techs thought that they had vanished along with their profits.
 
Instead of having a meaningful recover, former President George W. Bush and former Federal Reserve Chairman Alan Greenspan came up with the idea to inflate another bubble. George Bush didn't want a recession happening on his watch and Alan Greenspan -- being a good friend to George Bush -- wanted to help his political buddy get elected. So Alan Greenspan lowered interests’ rates, and instead of having a big fallout from the Nasdaq crash, or even a mild recession, it ended up being a nice slowdown.

The parallels between the Dot Com Bubble and the Housing Bubble are completely one in the same. The Federal Reserve was once again loose, printed a ton of money, and lowered interests’ rates to 1 percent. This along with other government initiatives fueled the Housing Bubble. People bought houses not for a place to live, but because they could make a lot of money doing so. The idea was never to live in those houses. The idea was to sell it to someone else, who also had no intention of living in those houses. But sooner or later, someone has to live in that house. And when that person decides to do so, they would have to be left holding the bag for a very big disaster.
 
When the bottom fell out, once again, the housing market crashed because of all these mal-investments, bad fiscal policy and reckless monetary policy. And what does President Obama decide to do to fix this problem? Not by letting the market re-calibrate itself, but by bailout out the Housing Market, Auto Industry, Banks and Government institutions responsible for creating this mess and also enacted a Stimulus Program to reverse the effects of the economy. The cost: Trillions and Trillions of dollars. But where exactly did President Obama get the money from?