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General TradingF
Financial Contagion
Financial contagion is the spread of financial disturbances from one market, institution, or country to others. It can occur through trade linkages, investor panic, or interconnected financial systems, often amplifying crises beyond their point of origin.
Example
“When FTX collapsed in 2022, the financial contagion spread rapidly across the crypto industry — lending platforms, hedge funds, and exchanges with exposure to FTX all faced liquidity crises within days.”