Banking crises can be caused by inadequate governmental oversight, bank runs, positive feedback loops in the market and contagion.
Banking crises have a range of short-term and long-term repercussions, domestically and globally, that reduce economic output and growth.
Banks, consumers, and the government all contributed to improper borrowing and lending, which in turn created a downward spiraling economy.
The objective of economic recovery when in crisis is to stabilize the economy and recapture the value lost using economic stimulus strategies.
The 2007-2009 economic collapse was damaging not only to the U.S. but also global markets, driving the global economy into recession.