During the recent financial collapse, financial managers failed to do their job effectively because of risky financial decisions and poor investment decisions.
A financial collapse happens when the value of financial assets and instruments sharply drops. Due to a lack of readily available cash or convertible assets, businesses struggle to pay their debts, and financial institutions are unable to finance projects or meet urgent demands. Consumers' wages and possessions are at risk, investors' faith in the value of their assets is eroded, and this makes it difficult for them to make loan payments.
The financial collapse can be broken down into three phases, starting with the onset of the problem. There are many reasons why economic systems fail, including institutional financial mismanagement, design flaws, and regulatory shortcomings.
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