DBC 2443 - Domino Effect

 

The Banking Tutor

Daily Banking Concept -  2443

                           Domino Effect

 

The domino effect in finance is a chain reaction where the failure or distress of one financial institution, sector, or asset class causes a rapid, cascading collapse of others due to high interconnectedness, similar to falling dominoes. It transforms isolated shocks into systemic crises, often driven by panic selling, liquidity shortages, and loss of investor confidence.